Office-based practices get boost as HCFA releases new fee schedule
Office-based practices get boost as HCFA releases new fee schedule
Hospital-intensive specialties take a hit
The roller coaster ride toward installing a relative value-based formula for determining Medicare’s physician fee schedule finally came to a stop — for now, anyway — when the Health Care Financing Administration (HCFA) published its long-awaited physician payment schedule for the year 2000.
The new rule converts the current charge-based malpractice relative value units (RVUs) to resource-based RVUs beginning next year. Meanwhile, practice expense RVUs will be gradually phased in over the next several years.
"With the implementation of resource-based malpractice RVUs in 2000 and full implementation of the phase-in for practice expense RVUs in 2002, all RVUs in the Medicare program will then be resource-based," notes Pat Smith of the Medical Group Management Association’s (MGMA) Washington, DC, office.
At the heart of the practice expense issue has been a high-stakes debate between HCFA, office-based physicians, and facility-intensive specialists over the proper distribution of Medicare payments.
HCFA has contended it has historically overpaid hospital-oriented practices because it already pays for a facility’s clinical staff and other expenses under Medicare Part A. Meanwhile, primary care physicians have been underpaid because Part B payments did not fully account for their office and staff costs, says HCFA.
The final regulation also adjusts the physician practice expense RVUs by excluding costs associated with clinical staff accompanying physicians to a facility setting such as a hospital. This change will decrease payments for some services that are performed primarily in hospitals and increase payments for many office-based services.
With the implementation of this rule, HCFA says it will "eliminate the last vestiges of payment inequities that resulted from charges that did not accurately reflect the relative resources involved in providing a service."
Even so, most physician groups will be relatively unaffected by this proposal. "The majority of practices will experience increases or decreases to total allowed charges from plus 2% to minus 2%, depending on the number of services performed in a facility setting," notes Smith.
However, anesthesiology and cardiac surgery will not be so lucky. These specialties will see their practice expense payments cut between 6% and 9% over three years.
On the plus side, pathology can expect a 9% jump in payments between now and 2002.
Facility-based practices can also expect to be kicked in the wallet. For example, an academic practice that provides most of its ambulatory care in hospital outpatient clinics will see significant decreases in visit and consult payments as a result of HCFA’s position that clinical overhead is paid to the hospital and should not be part of the Part B payment.
(For stories on the coding-related impact of the new fee schedule, see Physician’s Coding Strategist supplement, p. 183.)
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