HCFA introduces new malpractice formula
Host of other changes proposed
The Health Care Financing Administration’s (HCFA) proposed physician payment plan would convert the current charge-based malpractice formula to resource-based relative value units (RVU) starting next year with no transition period.
"Due to the relatively small size of the malpractice component of the fee schedule compared to the work and practice expense components, this adjustment will have less of an impact than previous resource-based adjustments," says Pat Smith, a spokesperson for the Medical Group Management Association (MGMA) in Englewood, CO.
According to HCFA’s estimates, most specialties will only notice an average adjustment of plus or minus 0.5% in their total allowed Medicare charges. "On the two ends of the payment spectrum, emergency medicine will increase 2.7% and cardiac and orthopedic surgery will decrease 1% under the proposal," concludes an MGMA analyst of the proposal.
In its proposed rule, HCFA suggests it may have made a mistake by including clinical staff time for services performed in a facility setting in last year’s 1999 practice expense data.
To correct this, HCFA wants to exclude from its data all staff time allotted to the use of clinical staff in the facility setting based on the following reasons:
• Medicare should not pay twice for a service. (Facility clinical staff are already paid for under Part A).
• It is not a typical practice for most specialties to use their own staff in the facility setting.
• Inclusion of these costs is arguably inconsistent with both the law and Medicare regulations.
"Most physician groups would be relatively unaffected by this proposal across specialty lines. The majority will experience additional increases or decreases to total allowed charges from +2% to -2%, depending on the number of services performed in a facility setting," says Smith.
Anesthesiology and cardiac surgery would, however, be hit hard by the proposal, seeing additional payment reductions of approximately -8% over the four-year phase-in of the final practice expense formula.
Also, facility-based practices are likely to be zapped by the change, predicts MGMA analysts. For example, an academic practice which provides most of its ambulatory care in hospital outpatient clinics could experience a significant drop in its visit and consult payments because HCFA contends that clinical overhead is paid to the hospital and should not be part of the Part B payment.
Some sample facility codes that would be effected by these proposed changes include:
— 99211 Outpatient Visit, est.13.558.68 (-36%)
— 99212 Outpatient Visit, est.26.7421.88 (-18%)
— 99241 Office Consultation 38.5531.26 (-19%)
— 99242 Office Consultation 70.5062.86 (-11%)
In addition to the new FY 2000 fee schedule, HCFA’s proposed rule contained a number of other changes:
• Prostate cancer screening.
Effective Jan. 1, 2000, one digital rectal examination and one screening prostate-specific antigen blood test would be covered by Medicare Part B on an annual basis. In a related move, President Clinton’s Medicare reform measures would eliminate all co-insurance and copayments associated with health screening tests.
• CPT modifier -25.
For procedures where the global surgery rules do not apply, HCFA proposes that a provider be permitted to only bill for a separately identifiable evaluation and management (E/M) service by using the CPT modifier -25. Because all procedures have an inherent E/M component, for an E/M service to be billed there must be a significant, separately identifiable service documented in the medical record.
"It is a good thing that HCFA recognizes there can be a surgical procedure in addition to the E/M visit," says Kenneth McKusick, MD, chairman of the American Medical Association’s Correct Coding Policy Committee. However, the change would also create a major "hassle factor," he says. Specifically, it will take time for physicians to learn how to use the -25 modifier, which will result in claims being denied in the meantime.
• Nurse practitioners.
HCFA is revising its recent requirement that nursing practitioners (NP) have a master’s degree to prevent qualified NPs who are practicing under Medicare rules from being excluded from the program. HCFA would, however, require first-time applicants for Medicare billing numbers to have a master’s by Jan. 1, 2003. After Jan. 1, 2001, NPs applying for a Medicare billing number must be registered and authorized under state law and certified by a recognized certifying body with established standards for nurse practitioners.
• Supervision of diagnostic testing.
HCFA proposes removing physician supervision requirements that now apply to tests performed by physician assistants (PA), NPs, and clinical nurse specialists. HCFA would, however, require that these practitioners be legally authorized by state law to perform diagnostic tests. PAs must continue to work under the general supervision of the physician as per Medicare employment requirements.
Clinical Laboratory Improvement Act and physician self-referral supervision requirements would continue to apply. (Note: At the time of the this proposed rule, physician supervision requirements that had been scheduled to take effect Jan. 1, 1998, continue to be delayed indefinitely.)
• Physician pathology services and independent laboratories payments.
HCFA ends payments to independent laboratories under the physician fee schedule for technical component services furnished to hospital inpatients. Under the change, HCFA would only pay hospitals for the technical component service furnished to inpatients.
• Anesthesia billing.
Regulations would be revised to allow anesthesiologists and certified registered nurse anesthetists to sum up blocks of time around a break in continuous anesthesia care as long as there is continuous monitoring of the patient within the blocks of time. The intent is to allow payment for instances where there may be a break between induction and maintenance of anesthesia.
• Pediatric surgical codes.
Changes would affect approximately 48 pediatric surgical service codes. HCFA is continuing to look into the specific changes that will go into the codes and will propose final values in the final rule implementing the FY 2000 fee schedule.
| Proposed Payment Changes for Liability Expenses | ||
| Listed here is the impact on total allowed charges by specialty of the resource-based liability expense relative value units. | ||
| Specialty | Allowed Charges |
Total Payments |
| Anesthesiology | 0.3 |
-0.1% |
| Cardiac surgery | 0.4 |
-1.0% |
| Cardiology | 3.7 |
-0.6% |
| Clinics | 1.6 |
0.3% |
| Dermatology | 1.3 |
0.1%> |
| Emergency medicine | 0.8 |
2.7% |
| Family practice | 3.0 |
0.5% |
| Gastroenterology | 1.1 |
-0.1% |
| General practice | 1.1 |
0.6% |
| General surgery | 2.2 |
-0.1% |
| Hematology/oncology | 0.6 |
0.3% |
| Internal medicine | 6.4 |
0.4% |
| Nephrology | 0.9 |
1.3% |
| Neurology | 0.8 |
0.5% |
| Neurosurgery | 0.4 |
0.7% |
| Obstetrics/gynecology | 0.4 |
-0.6% |
| Ophthalmology | 3.8 |
-0.4% |
| Orthopedic surgery | 2.3 |
-1.0% |
| Other physician | 1.2 |
0.2% |
| Otolaryngology | 0.6 |
-0.2% |
| Pathology | 0.5 |
-0.6% |
| Plastic surgery | 0.2 |
-0.1% |
| Psychiatry | 1.1 |
-0.1% |
| Pulmonary | 1.0 |
0.4% |
| Radiation oncology | 0.6 |
-0.4% |
| Radiology | 2.8 |
-0.5% |
| Rheumatology | 0.3 |
0.5% |
| Thoracic surgery | 0.7 |
-0.8% |
| Urology | 1.3 |
0.1% |
| Vascular surgery | 0.3 |
-0.2% |
| Source: 64 Fed Reg 39,608-39,771 (July 22, 1999). | ||
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