The hold is designed to avoid disruption in the delivery of services and payment of fee-for-service claims, the Centers for Medicare and Medicaid Services said. “This should have minimum impact on provider cash flow because, under current law, electronic claims are not paid any sooner than 14 days (29 days for paper claims) after the date of receipt. Meanwhile, all claims for services delivered on or before June 30 will be processed and paid under normal procedures.”

After 10 business days, contractors will begin releasing claims with a date of service of July 1 and later for processing, and this could result in payments reflecting the 10.6 percent cut, CMS cautioned. But if a new law is enacted reversing the cut retroactive to July 1, CMS said it is prepared to automatically reprocess most of those claims that have already been processed.

Claims with dates of service July 1 and later billed with a submitted charge at least at the level of the January 1-June 30, 2008 fee schedule will be automatically reprocessed if Congress retroactively reinstates the update that was in effect for that time period. Any lesser amount will likely require providers to re-submit a revised claim.

“To the extent possible, providers may hold claims in-house until it becomes clearer as to whether new legislation will be enacted or until cash flow becomes problematic.” CMS said. This will reduce the need to reconcile two payments (the initial claim and the reprocessed claim), and will simplify provider billings of beneficiary coinsurance and payment calculations for payers that are secondary to Medicare.