Fixing Medicare payment rates for physicians is still going to be really expensive, according to the latest estimate from the Congressional Budget Office (CBO).

The CBO updated its score sheet on how much a Medicare "doc fix" will cost in 2011 and beyond. It's noteworthy that the CBO assumes 2010 payments will remain flat for the rest of the year. Payments are set to drop 21.3% on June 1. But freezing rates and preventing the 21.3% sustainable growth rate (SGR) cut from June through December will cost $6.5 billion.

Here's what else the CBO says:

• Maintaining 2010 payment rates in fiscal year (October-September) 2011 would cost $9.2 billion extra. A 2% increase in fiscal year 2011 would cost $9.8 billion. Payments would drop 30% in 2012 if no fix was enacted that year.
• Extending the current pay rate through 2020 would cost an extra $275 billion.
• Using a Medicare Economic Index of 0.7% to 1.8%, annual increases to physician payments in fiscal years 2011-2020 would cost $329.9 billion.

Being on-call for a hospital is one way for your physicians to make an extra buck, especially because most hospitals offer a cash bonus on top of services done. More than half of primary care physicians get paid an extra bonus for being on-call, according to a just-released survey by the Medical Group Management Association (MGMA).

More than half of primary care physicians get paid an extra bonus for being on-call, according to a just-released survey by the Medical Group Management Association (MGMA).

Just over 56% of primary care doctors surveyed by the MGMA report getting some type of additional cash compensation for taking on-call duties, whether for a few hours at a time or for entire 24-hour periods. About 73% of surgical specialists were paid extra.

Washington Post blogger Ezra Klein opined on Rep. Paul Ryan's (R-Wis.) April 28 comments regarding a permanent Medicare doc fix and the costs associated with health care reform.

In short, Ryan says the cost of a permanent fix to the sustainable growth rate (SGR) mechanism used in the Medicare payment formula needs to be factored into the costs of health care reform. The new health law will cut the deficit over the next 10 years, according to the Congressional Budget Office. But, if you add the $250 billion to $300 billion needed to eliminate the SGR -- health reform will add to the deficit.

Klein, a liberal blogger, disagrees with this is an argument, which is being made by other Republicans.

The SGR was created in 1997 by a Republican Congress and was signed into law by President Clinton, a Democrat. Ryan and other Republicans are "trying to add the repeal of a Republican policy passed in 1997 into the cost of a Democratic bill being passed in 2010," Klein argues. "But that's a bit like adding the cost of the Iraq War onto the bill, or maybe the Bush tax cuts. It's true that those were misguided, costly policies. But they're not part of the Affordable Care Act. They're part of the baseline that the Affordable Care Act changes."

Regardless of who is right and who is wrong, the costs of fixing the SGR is a major hurdle in Washington. Lawmakers are very conscious of federal debt and deficits these days.

Read more on the Medicare doc fix

The headaches and hassles physician practices endured during Medicare Administrative Contractor (MAC) transitions in recent years are now detailed in a new Government Accountability Office (GAO) report. The transitions held up millions of dollars in Medicare reimbursements and caused backlogs of claims appeal cases for months, the GAO says.

Medicare contractor reform, mandated by the Medicare Modernization Act of 2003, will consolidate 51 Medicare "legacy" carrier jurisdictions into 15 MACs by 2011. So far, more than 30 states have transitioned to nine MAC jurisdictions. The GAO found MACs have not met performance standards during those transitions and ultimately physician practices suffered for it.

The report gives examples of "provider challenges" during the transitions. Here's one:

According to CMS, one MAC inherited approximately 27,000 pending provider enrollment applications from its legacy contractor. According to a provider association, about 11,000 of these had been pending for four to six months. More than 1,600 providers and provider groups reported to us delays of 6 months or more for payments of $40,000 to $80,000, and in one case, as high as $3.5 million.

The report doesn't name the state or the MAC, but the circumstances are close to what went on in California with the MAC Palmetto in 2008.

Read more on Medicare Administrative Contractor report

The Medicare Administrative Carrier (MAC) Highmark is reporting they processed Medicare claims with a conversion factor using the 21% sustainable growth rate (SGR) cut.  Initially, Highmark announced no claims were processed at the reduced rate. The MAC now says the cut went through because of an "internal system error."

"Systems corrections have been made, and claims paid at the incorrect -21% fee will be reprocessed automatically," Highmark says. "[The MAC] plans to continue releasing held claims on a first in first out basis, which will process with the correct fee schedule."

The error effects claims with dates of service from April 1 through April 7.  

Highmark is the MAC for Pennsylvania, Delaware, Maryland, New Jersey and the District of Columbia metro area.