Medicare Payment Updates: Some You'll like, Some You Won't

By Murray, Dennis | Medical Economics, January 23, 1995 | Go to article overview

Medicare Payment Updates: Some You'll like, Some You Won't


Murray, Dennis, Medical Economics


There's good news as the Medicare fee schedule enters its fourth year. Conversion factors, which help determine reimbursement for each service you provide, have increased across the board.

The jump for primary-care services--including the evaluation-and-management codes for office visits--is 7.9 percent, the same increase as last year. Surgeons did much better: The conversion factor for procedures is up 12.2 percent, compared with 10.0 percent in 1994. The hike is 5.2 percent for a third conversion factor that covers certain non-surgical services, including anesthesia.

This year's increases are partly tied to how much doctors billed Medicare in 1993. As in 1992, surgeons' utilization rates were lower than HCFA had predicted for primary-care doctors. Therefore, surgeons were rewarded with fatter conversion factors for 1994 and 1995.

"The total billings are less because HCFA keeps hammering down the relative values," says Philip L. Beard, president of ProSTAT Resource Group, a reimbursement consulting company in Shawnee Mission, Kan. "Medicare isn't reducing spending. It's actually laying out more than it wants to, compared with the current rate of inflation for medical costs."

Prices for physicians' services rose 4.7 percent in the 12 months ended Oct. 31, 1994, according to the U.S. Bureau of Labor Statistics. That compares with a 2.6 percent increase for all items of the Consumer Price Index over the same period. HCFA admits that its current formula is flawed, but there are no immediate plans to revise the methodology.

"Next year, physicians aren't going to see conversion factors that are two or three times the inflation rate," predicts James R. Lyle, president of HealthCare Consultants of America in Augusta, Ga., which specializes in practice management and reimbursement issues. "That means it's going to be more important than ever for doctors to pay close attention to controlling their overhead costs."

No matter what happens, how much you'll earn from Medicare will depend on your volume and mix of services and whether you are a participating doctor, says Jerry Strick, vice president of consulting services for Healthcare Strategies in Oakbrook Terrace, Ill. "So if you're a primary-care doctor, don't automatically plan on an 8 percent rise in your income this year because of the new conversion factor."

Lower RVUs for many services. In keeping with HCFA's pledge of "budget neutrality," relative value units for all services are being reduced 1.1 percent this year. RVUs are multiplied by the appropriate conversion factor to arrive at your reimbursement.

"You have to question the integrity of the relative values that HCFA is spitting out now," Phil Beard says. "The time, intensity, skill, and training that go into those services probably haven't changed. I don't think the original relative value study ever assumed that HCFA would fiddle with it to the extent it has for budgetary reasons."

But change is in the wind. HCFA is reviewing all relative value units, with the help of the American Medical Association's Relative Value Update Committee. As a counterweight, the Feds will also call on the medical directors of Medicare carriers for their suggestions. All recommendations, including any from specialty societies, are due this September. Final changes are supposed to be published in October 1996, and the new RVUs could go into effect as early as Jan. 1, 1997.

For this year, work-component RVUs have been assigned to dozens of reconstructive-surgery codes, including those covering rhinoplasty and maxillofacial procedures. Last year, Medicare carriers established work RVUs for these surgical codes on a case-by-case basis. Work RVUs were also assigned to four newborn-care codes--99431 through 99433, and 99440. Although very few infants are covered under Medicare, many commercial plans, including state Medicaid payers, establish their fee schedules using Medicare's relative value units as a starting point. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Medicare Payment Updates: Some You'll like, Some You Won't
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.