August 2006 | Vol. 24, No. 8

CMS Warns of 9-day payment hold due to DRA

The AuntMinnie.com website reported in early July that the U.S. Centers for Medicare and Medicaid Services (CMS) provided advance warning that it would be implementing a nine-day hold on Medicare payments in September 2006, as mandated by the Deficit Reduction Act (DRA) that is to go into effect on 1/1/07.

According to AuntMinnie.com website, the CMS said the payment delay is specified in section 5203 of the DRA, and requires that a brief hold be placed on Medicare payments for all claims during the last nine days of the federal fiscal year (September 22-30, 2006). A CMS statement said no interest will be accrued and no late penalties will be paid to an entity or individual by reason of the one-time hold. All claims held during the period will be paid on October 2, 2006.

CMS said the hold only applies to claims subject to payment. It does not apply to full denials, no-pay claims, and other nonclaim payments such as periodic interim payments, home health requests for anticipated payments, and cost report settlements. In addition, payments will not be staggered and no advance payments will be allowed during the nine-day hold period.