NC Updates: Medicaid repayment & SGR repeal

 In Articles, News, Provider Notes

Attention NC providers!

This week has marked several important changes that may affect your practice. Click the links below to learn more.

Medicaid 3% Repayment

SGR Repeal Passes Senate!

Medicaid 3% Repayment

We have received further information regarding the 3% Medicaid rate cut as it applies retroactively to payments for dates of service going back to 1/1/2014.


In 2013, the NC General Assembly included a 3% “withhold” for all Medicaid services. After difficulty developing the program, the “withhold” was redrafted as a cut with an effective date of January 1, 2014. Due to delays in NCTracks programming, the 3% cut was implemented on March 2nd. At the time of the implementation, Medicaid’s plans for recoupment of 3% of payments for dates of service 1/1/2014 – 3/1/2015 were still being finalized.


On Tuesday evening, 4/14/2015, Medicaid announced planned recoupment dates. Claims will be reprocessed beginning next week, 4/20/2015, and recoupments of 3% of the previously paid amounts will be seen in checks beginning 4/28/15 through 6/23/15. See the official announcement and more info, including frequently asked questions, on the DMA website.

How does this affect my practice?

  • If you are a primary care physician who successfully attested for incentive payments under the ACA, 3% recoupment applies to payments for dates of service 1/1/2015 – 3/1/2015, for claims processed prior to 3/2/2015 (2 months of activity)
  • If you are a specialist or mid-level provider, 3% recoupment applies to payments for dates of service 1/1/2014 – 3/1/2015, for claims processed prior to 3/2/2015 (14 months of activity)

How do “recoups” work?

  • Medicaid will reprocess claims via a method called recoup/repay. DMA refers to this as a “repayment” because the reprocessing involves voiding their entire original payment and simultaneously paying out the entire claim again at the lower rate; this creates an amount owed on each claim. Remittances will list the full claim detail, reversal, and subsequent repayment for each claim.
  • At the same time claims are reprocessing, new claims are still being adjudicated normally. You will not need to issue payments to Medicaid; instead, they will reduce payment amounts to you for current and future activity until the owed amount has been satisfied.

Reprocessing occurs in the same order as claims were originally received. Any or all checkwrites 4/28/2015 through 6/23/2015 may be affected.

What are next steps?

  • Providers: No specific action is required on the part of most providers. DMA will contact you directly if any special circumstances apply that require action.
  • MSOC: There is often a significant administrative burden in posting recoup/repays to practice management systems due to remittance formats; many times, transactions or entire checks must be hand posted. MSOC will endeavor to continue posting all payments within our normal turnaround times. We will keep you apprised of any significant posting delays that we experience.

Please contact your client analyst with any questions.

SGR Repeal Passes Senate

In a historic decision Tuesday night, the Senate voted to pass H.R. 2, the “Medicare Access and CHIP Reauthorization Act”, which permanently repeals the Medicare Sustainable Growth Rate (SGR) formula.

See the announcement from the North Carolina Medical Society below:

Why is this important?
The SGR was used in the calculations to determine the Medicare Physician fee schedule, and it was set to reduce your Medicare Part B rates by 21% on service dates starting 4/1/15. With its repeal, that cut has been avoided. Additionally H.R. 2 increases the fee schedule conversion factor by 0.5% on July 1, 2015 and by another 0.5 percent on July 1, 2016.

Please note the bill made no reference to an ICD-10 delay, thus you should move forward with your preparation for the October 1, 2015 implementation date.

Starting 4/1/15, Palmetto GBA, the Medicare contractor for North Carolina, made the decision to hold claims for service dates on or after 4/1 pending potential legislation from Congress. This was done to minimize any reprocessing of claims that would need to correct claims underpayment in the event of legislation.

What’s going to happen to the claims Medicare was holding?

On April 13, Palmetto GBA posted an update stating they would be begin releasing held claims on April 15. At this time, it is unclear whether Palmetto GBA was able to “fix” their claims processing system to correct the 21% reduction prior to releasing the first round of held claims.

No official response has been published by Palmetto GBA yet. However, they previously stated that if the SGR was repealed they would reprocess claims internally and issue updated payments to providers. See more information here.

MSOC Health will continue to monitor communication from Palmetto GBA closely until a resolution is clear.

Is there anything I need to do?

Not at this time. As explained above, if any Medicare claims are processed with a reduction in error, Palmetto will reprocess internally.

Thank you to everyone for reaching out to legislators to help pass the SGR repeal!

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