Dissecting the year 2001 physician fee schedule
Many changes, but few real fireworks
While the new physician fee schedule Medicare recently proposed has some medical specialties unhappy, it does not contain the kind of controversial policy initiatives that have caused so much hoopla over the past several years.
According to the schedule, Medicare expects to pay physicians $39 billion in 2001, up from $37 billion this year. Payments will be based on a blend of 75% resource-based relative value units (RVUs), and 25% from the old charge-based system reflecting historical costs. According to present legislation, the physician fee schedule should be entirely RVU-based by 2002.
The schedule also includes updated RVU weights for CPT/HCPCS codes and changes in geographic practice cost indices (GPCI) that help determine how much physicians will be paid for specific Medicare services, but "no major policy announcements," notes Pat Smith of the Medical Group Management Association's (MGMA) Washington, DC office.
Here are the details of Medicare's proposed 2001 physician fee schedule, according an analysis of the document done by MGMA.
• Inpatient stay/observation. Current HCFA policy varies when it comes to physician payments for inpatient observation when a patient
is admitted on one day and discharged the next because HCFA policy draws an "arbitrary line
at midnight," contends the MGMA analysis.
To correct the problem, HCFA proposes to pay for both inpatient hospital admission services (CPT codes 99221 and 99223), and hospital discharge services (CPT codes 99238 and 99239) for inpatient services when a patient stays for 24 hours or longer — and when the length of stay is documented as such.
"If a patient is admitted for observation for eight hours or less, HCFA will pay only for admission services on that day, and the discharge service will not be separately billable," says the MGMA. However, if admitted as an inpatient at a hospital or as an observation patient for a period between eight and 24 hours, HCFA will pay for both the admission and discharge services — with some modifications. For instance, the physician work RVU values for the various discharge CPT codes will be lowered to recognize the difference in the work involved.
• Changes in the global fee for selected codes. HCFA wants to change the reimbursement for several codes connected to pacemaker and cardioverter defibrillator procedures. As many of those patients require substantial postoperative care, some of which is not directly tied to the implanted device, these services are often covered by a global fee. In turn, a physician may end up providing services unrelated to the implantation of the device and for which they are not reimbursed.
In turn, HCFA proposes that the global period for the following codes be changed from 90 to 0 days: 33206, 33207, 33208, 33212, 33213, 33214, 33216, 33217, 33218, 33220, 33233, 33234, 33235, 33240, 33241, 33244, 33249, 33282, and 33284.
HCFA would also reduce the work RVUs for those codes to reflect the fact that the service no longer covers such an extensive period of time.
• Antigen supply. HCFA intends to increase current limits on the supply of antigen Medicare will cover at one time from 12 weeks to 12 months to reflect current treatment standards.
• Resource-based practice expense phase-in. The Health Care Financing Administration (HCFA) will continue the phase-in of resource-based practice expense relative value units (PERVU), switching over from the older system of charge-based PERVUs. For 2001, PERVUs will be 25% charge-based and 75% resource-based. This phase-in will be completed in 2002 when PERVUs will be solely resource-based.
• Collecting data to modify practice expense RVUs. HCFA is not accepting practice expense data from specialty organizations for the moment since the American Medical Association has not finished pilot testing and vetting a new survey instrument for collecting the kind of statistical data Medicare is asking for to determine practice expense RVUs. Look for more debate on that issue since this data could have a significant impact on the distribution of RVU-related payments among different specialties.
• Payment for casting materials. "Because HCFA policy allows separate payment for splints, casts, and other devices used for the reduction of all fractures and dislocations, the agency proposes removing those expenses from practice expense calculations for applicable codes," notes the MGMA.
Mental health added
• Facility and nonfacility payments. HCFA added community mental health centers (CMHCs) to the list of locations considered to be facilities. The list also includes hospitals, skilled nursing facilities, and ambulatory surgery centers. That means physician services supplied in a CMHC will be reimbursed at the lower facility rate, says MGMA.
Practices also should note that HCFA has clarified that the nonfacility practice expense is to be used when calculating payment for such outpatient therapy services as physical, occupational therapy, and speech language pathology regardless of the actual setting.
• Mid-level practitioner reimbursement. HCFA only wants to use physician practice expense data when determining the practice expense RVU for mid-level practitioners.
"Removal of the services performed by mid-level practitioners from the practice expense calculations would simplify the methodology and
be consistent with the statutory requirement that HCFA reimburse mid-level providers based on a percentage of the physician fee schedule amount," says the MGMA analysis. Under the Balanced Budget Act, mid-level practitioners are now paid at 85% of the physician fee schedule.
• Geographic practice cost indices (GPCI) update. As required by law, HCFA proposes to update the GPCIs across the country and phase that update in over 2001 and 2002. Changes to
the GPCI values will be based on the same data used to calculate the previous update. The GPCI is comprised of three different values: physician work, practice expense (which is a combination of employee wages, rent, and miscellaneous),
and malpractice costs. The figure for each of those three costs represents HCFA's estimation
of its percentage in the overall cost of providing services. When multiplied by RVU values, GPCIs are used to modify payments to reflect local variations in the three values.
Bottom line: Those changes to GPCI values will be budget-neutral and are not expected to have a significant impact on payment rates, says the MGMA.
• Anesthesia services. Currently, anesthesiologists can be paid for up to four concurrent procedures, provided they comply with certain guidelines. However, HCFA policy does not instruct carriers how to pay for services when an anesthesiologist fails to meet all of those guidelines.
Options HCFA is considering to correct that oversight include:
— specifying that the physician furnishing medical supervision must perform, at a minimum, the preoperative evaluation, participate in induction, remain available for consultation, and provide a minimum level of monitoring;
— establishing payment for medical supervision at 40% of the payment amount for the service performed by the physician alone;
— applying the proposed medical supervision payment amounts to incompletely medically directed cases;
— limiting the number of concurrent cases the physician can supervise to five.
• Physical therapy supervision and benefit caps. Before now, questions existed about whether an owner-physical therapist had to be present to supervise other licensed physical therapists in the group. HCFA takes the position that a physical therapist who owns a practice may be "off the premises" when other legally authorized therapists are providing patient services — and those licensed therapists may furnish supervision for therapy assistants.
• Outpatient therapy caps. HCFA says it is gathering information on alternatives to the present annual cap on therapy services. If you have comments or suggestions, don't be shy. Ideas HCFA's considering include:
— establishing a cap per diagnosis rather than per year;
— establishing payment based on patient groupings by primary diagnosis and average number of treatments, with options for variants;
— basing payment on an episode of occurrences of illness or injury with a cap amount adjusted to address geographic differences in cost;
— developing a sustainable growth rate for outpatient therapy services.
If you want to comment on any part of the proposal, send one original and three copies of your statement to: HCFA, Department of Health and Human Services, Attention: HCFA 1120 P, P.O. Box 8013, Baltimore, MD 21244-8013. To be considered, comments must be received by Sept. 15.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content