Medicare begins processing doctor claims with a 21% cut in pay.

WASHINGTON -- The Centers for Medicare and Medicaid Services (CMS) today began reimbursing physicians 21% less for treating Medicare patients after Congress failed to block the cut.

The lower reimbursement rate technically went into effect on June 1, but CMS had announced that it would not process claims for medical services delivered after the deadline, giving Congress additional time to block the 21% cut. This most recent grace period -- CMS has issued four such reprieves this year -- expired on June 17.

It takes 14 days to pay electronic claims, so in a few weeks, doctors will see reimbursements that are 21% lower than they would normally receive, unless Congress takes action or CMS grants yet another extension.

"It is, frankly, inconceivable that Medicare is beginning to reimburse doctors at a 21% cut over their already below-cost payment level," the Alliance for Speciality Medicine said in a statement. The group will be coming to Washington next week to discuss fixing the Medicare payment system.

In a last-minute shocker, the Senate voted Thursday against postponing a scheduled 21-percent cut in Medicare reimbursement to physicians and other healthcare providers. Sixty senators were needed to end filibuster debate and stop the cuts under Senate rules. Fifty six voted in favor, while 40 opposed. There was no Republican support. (And, of course, no support from Senator Lieberman, who is a Republican in disguise.) Another consequence of the vote is that tens of thousands of Americans who have exhausted their jobless benefits would not be eligible for more. In addition, new taxes on wealthy investment managers would not be imposed, along with an increase in liability taxes on oil companies, leading Democrats to contend that Republicans were protecting Wall Street and the oil industry, according to the New York Times.

“We’re not going to give up,” said Senator Harry Reid, the Nevada Democrat and majority leader. “We know the American people only have us to depend on.”

Medicare has been holding all claims from June until today, pending the action that was “supposed” to reverse this 21-percent mindblowing decrease. Now that the vote is in, they will pay the claims retroactively at the lower rate.

This is really bad news for seniors. Thirty one percent of primary care physicians surveyed by the American Medical Association (AMA) said they would not accept new Medicare patients if the cuts went through. I predict much worse. A 21 percent cut is the death knell for doctors who have a lot of Medicare patients. Last month Medicare paid me $84.00 for a 99213 office visit. That was already unsustainable and the only way anyone stays in business is by seeing other patients with better payment. The new payment will be $66.36. Hello bankruptcy court.

Pulling the Medicare provision out of the stalled jobs bill and voting on it separately, the Senate unanimously agreed this afternoon to delay a 21 percent cut to doctors’ Medicare reimbursement rates until December.

Doctors who treat Medicare patients will be subject to a 21.3 percent cut in their payments -- at least for now -- despite a last-minute effort by the Senate to delay the cuts.

In his weekly address, the president asks Congress to act on Medicare measure. The Senate today passed a six-month extension of the so-called Medicare "doc fix" after Democrats agreed to a Republican requirement that the extension not add to the deficit.

The Senate's late action only gets the bill a third of the way into law. The measure has to be voted on by the House of Representatives and then signed by President Obama, and until then, the Centers for Medicare and Medicaid have to pay doctors the reduced rates.