Proposed formula includes two-tier codes
Separate but not equal
For most medical services, there will be two levels of practice expense RVUs per code under HCFA's proposed new formula.
The lower practice expense RVUs apply to services furnished to hospital or ambulatory surgical center patients. Higher practice expense RVUs would apply to:
- services furnished in a physician office;
- services other than visits that are performed in a patient's home;
- services furnished to patients in a nursing facility, skilled nursing facility, or institution other than a hospital or ambulatory surgical center.
However, only one practice expense RVU per code would be applied for:
- services that have only technical component practice expense RVUs or professional component practice expense RVUs;
- evaluation and management services, such as hospital or nursing facility visits, that are furnished exclusively in one setting;
- major surgical services.
Exactly how much any particular group's Medicare revenues will be affected by the proposed changes in the practice expense formula depends greatly on the mix of services the specialty provides and the sites where the services are performed. (See related chart, inserted in this issue.)
For instance, while the Balanced Budget Act of 1997 delayed initial implementation of the resource-based practice expense system until 1999, it created a "down payment" on the new system by increasing the practice expense payments for office visits in 1998. This was funded through decreases in the 1998 practice expense payments for certain procedures.
As a result, specialties that furnish more office-based services can expect larger increases in Medicare payments than specialties that provide fewer office-based services.
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