Physician fee schedule shifts to RVU payments
A look at what’s ahead
Medicare’s proposed 2002 payment schedule for physicians will complete the four-year transition from paying doctors based on the fees they charge to paying them according to the resources they use in providing services.
In 2002, for instance, all components of the fee schedule — physician work, malpractice expenses, and practice expenses — will reflect the relative costs of resources used in providing physician services. Physician fees in 2002 also will be affected by a statutorily required five-year review of the work component of the schedule.
Among the specialties, general surgery and pathology are slated for increases of 4% and 3% respectively, while ophthalmology can look for a 1% payment cut.
The Centers for Medicare and Medicaid Services (CMS) estimates it will spend some $45 billion in 2002 on physician fee payments. New physician services that Medicare will pay for in 2002 include an annual glaucoma screening for persons at high risk for glaucoma, for those with a family history of the disease, and for individuals with diabetes.
Medical nutrition therapy is also covered for the first time for individuals with diabetes or renal disease. Medicare also wants to increase payment for screening mammography services from $69 to approximately $88, as well as to provide payment for certain new mammography services.
Also included in Medicare’s 2002 physician fee schedule is a proposal permitting "auxiliary personnel to provide services incident to the services of physicians or practitioners who supervise them, regardless of the employment relationship."
Reimbursement experts say this will create greater flexibility for group practices to bill Medicare for services performed by physician assistants (PAs) and nurse practitioners operating as independent contractors when these contractors perform follow-up and other services on behalf of physicians in the practice.
Under current Medicare rules, PAs are free to perform any Medicare-eligible services in any setting that’s been approved by the program, provided they conform to local state guidelines.
In exchange for this increased flexibility, Medicare lowered its PA payment rate from 100% to 85% of the fee schedule in effect if the same service had been provided by a physician.
While Medicare still pays PAs through their practice employer, Congress also made it easier for them to enter into an independent contractor relationship with practices.
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