HCFA's RBRVS proposal stirs up debate
September 1, 1997 3 minutes read
HCFA’s RBRVS proposal stirs up debate
By Rita A. Scichilone, MHSA, RRA, CCS
Professional Management Midwest
Omaha, NE
[Editor’s note: The Washington, DC-based Health Care Financing Administration’s (HCFA) revised Resource-based Relative Value Scale (RBRVS) practice expense proposal contains what some consider to be a radical set of first-ever dual site-of-service payment rates for almost 70,000 procedure codes.
This two-tier payment system would replace HCFA’s current policy of automatically reducing posted practice expense fee schedules by 50% whenever physician services routinely performed in a doctor’s office are provided in a setting such as a hospital or ambulatory care facility.
The goal of this site-of-service payment system is to avoid double paying overhead costs for physician services and procedures routinely performed in a hospital setting, HCFA says. Expect plenty of debate before this two-tier system takes effect, reimbursement analysts say.]
Physicians who "take their show on the road" and provide services to patients in hospital outpatient departments remote from office locations, may be reimbursed differently by Medicare if a proposed payment system is implemented.
Holding clinics at rural hospital locations is a great way to bring specialty services to patients in their hometowns. In many instances, the hospital will charge a facility fee to cover personnel, equipment, and supply costs associated with patient services. The physician bills only for the professional fees.
Under the current system, a physician holding a weekly cardiology clinic in a hospital outpatient department would receive 21% less reimbursement from Medicare for these patients compared to patients who receive services in a physician’s office. When site of service "22" is listed in box 24B of the HCFA 1500, the payment is reduced to reflect the difference in practice expenses. A common mistake that some practices make is using site of service "11," which causes an overpayment for services and could be interpreted as abusive billing by the Medicare program. When the physician pays rent for the space and provides the staffing, equipment, and supplies, it is appropriate to bill for the service as an office-based visit. It is only when the hospital charges a facility fee and the physician does not provide "overhead" expenses, that site of service "22" is designated.
In Iowa, the participating cardiologist receives a payment of $51.29 for an established patient receiving level four services and billed with code 99214. For patients receiving the same services in the hospital outpatient department, the payment would be only $43.45.
Under the proposed system, code 99214 would have two different levels of practice relative value units (RVUs). One would be applied to hospital outpatients (22), and one would be for office patients (11). Currently the practice expense RVU for this code is 0.5. Only the services that would be performed in either location would have the two levels assigned. Hospital inpatients, nursing home visits, home visits, emergency department services, and other evaluation and management services that are only provided in one location would have a single RVU for practice expense as they always have.
This may encourage more physicians to perform services in the office rather than the hospital outpatient department. A cost analysis of practice expenses would be required to determine the financial impact of one site of service over another.
Supply codes have been permitted for some office procedures that reimburse physicians for the extra expenses associated with specific procedures. Under this proposal, supply codes will not be accepted, as the cost of the supplies is considered in the expense RVU assigned to the procedure codes. Separate payment would not be made for the current HCPCS codes for surgical trays or other currently allowed supplies (codes A42.63, A4300, and A4550).
Services such as pain management clinics are often hospital-based and will be affected by this proposed rule. If the services are provided to hospital outpatients, the site of service differential RVU will be applied. If the services are provided to patients in the office (even if the office is located inside the hospital), the normal practice expense RVU will apply.
Until the RVU numbers are available, it will be impossible to assess the financial impact of this proposed change in reimbursement.
(As a reader service, Hospital Payment & Information Management has compiled a list of these code changes. The list is available on the American Health Consultants’ Web site at http://www.ahcpub.com. Click on "special coverage.")
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