The results of the Harvard-AMA study, published in 1988, laid the groundwork for what is now known as the resource-based relative value scale (RBRVS).

Medicare implemented the RBRVS payment system on January 1, 1992.

How Physician Fees Are Determined

The RBRVS breaks down the total cost of providing a particular physician service into 3 components expressed in relative value units, commonly known as RVU’s:

1. Physician’s work RVU (wRVU) ~ [accounts for 52% of the cost] – Costs include the relative time, effort, and skill for each service.
2. The physician’s practice expense RVU (peRVU) ~ [accounts for 44% of the cost] – Costs associated with maintaining a practice, such as rent, equipment, supplies, and non-physician labor.
3. Malpractice expense RVU (mRVU) ~ [accounts for 4% of the cost] – Accounts for the professional liability insurance of the physician.

Each of the three cost components is adjusted by geographic region that accounts for variations across market areas in the cost of living.  So a procedure performed in Los Angeles is worth more than a procedure performed in Dallas.

The sum of these geographically adjusted RVU’s for a particular service then constitutes the total RVU of that service.

Finally, to convert this schedule into a fee schedule expressed in dollars, the total RVU of a given service is multiplied by a “conversion factor” – a dollar amount per RVU applied to all services in the relative value schedule.

The formula for calculating physician fee schedule payment amount is as follows:

Non-Facility Pricing Amount =

[(Work RVU x Work GPCI) + (PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x Conversion Factor (CF)

The conversion factor for CY 2011 was $33.9764 (CF in 2012 is $34.0376).

For example, the 2011 approved amount for CPT 99213 for Los Angeles, CA is calculated as:

Non-Facility Pricing Amount =

[(0.97 x 1.039) + (0.99 x 1.220) + (0.07 x 0.722)] x 33.9764

1.00783 + 1.2078 + 0.05054 = 2.26617 x 33.9764 = $77.00

The Pros and Cons of RVUs

Benefits of using RVUs:

• Useful tool to compare the relative difficulty associated with the different procedures
• Ability to benchmark data
• Associate physician’s work to his/her relative time, effort, and skill needed
• Accounts for cost of living variations – higher standard of living equates to higher RVUs

Criticisms against RVUs:

• Payment is based on effort and does not include adjustments for outcomes, quality of service, severity, or demand. This system leads to overuse.
• One effect attributed to the current RBRVS system is incentivizing specialists at the expense of primary care physicians (PCPs) — because specialist services require more effort and specialized training, they are paid at a higher rate.  This leads to fewer people selecting to stay in the field of primary care.
• The Specialty Society Relative Value Scale Update Committee (RUC) is largely privately run.  RUC is secretive, with the meetings being closed to the public and uninvited observers.
• The data are effectively copyrighted by the AMA, but its use is required by statute.
• Although the RBRVS system is mandated by the Centers for Medicare and Medicaid Services (CMS) and the data for it appears in the Federal Register, the American Medical Association (AMA) maintains that their copyright of the CPT allows them to charge a license fee to anyone who wishes to associate RVU values with CPT codes. The AMA receives approximately $70 million annually from these fees, making them reluctant to allow the free distribution of tools and data that might help physicians calculate their fees accurately and fairly.

Committees With Influence

The following is a brief explanation of how codes for physician services are developed and priced.  Our current payment system is based on procedure codes which are developed by a 17-member committee known as the CPT Editorial Panel. The AMA nominates 11 of 17-member group while the remaining seats are nominated by the Blue Cross and Blue Shield Association, the Health Insurance Association of America, CMS, and the American Hospital Association.  The CPT Committee issues new codes twice each year.

Another committee, the Specialty Society Relative Value Scale Update Committee (RUC), meets 3 times a year to set new values, determines the Relative Value Units (RVUs) for each new code, and revalues all existing codes at least once every 5 years. The RUC has 29 members, 23 of whom are appointed by major national medical societies. The six remaining seats are held by the Chair (an AMA appointee) and a representative from the following areas:

• AMA;
• CPT Editorial Panel;
• American Osteopathic Association;
• Health Care Professions Advisory Committee; and
• Practice Expense Review Committee.

Anyone who attends its meetings must sign a confidentiality agreement.

The influence of this secretive panel is enormous. The CMS, which oversees Medicare, typically follows at least 90% of its recommendations in figuring out how much to pay doctors for their work. Medicare spends over $60 billion a year on doctors and other practitioners. Furthermore, many private insurers and Medicaid programs also use the federal system in creating their own fee schedules.

Reimbursement to Medi-Cal institutional providers, except for clinics, designated public hospitals and local educational agencies, will be held per the schedule below:

•  Payments scheduled for March 1 [electronic funds transfer (EFT) date of March 5] will be held until March 15 (EFT date of March 19), and will be paid along with all services normally scheduled for payment that week.
• Payments scheduled for March 8 (EFT date of March 12) will be held until March 22 (EFT date of March 26), and will be paid along with all services normally scheduled for payment that week.

Payments to Medi-Cal non-institutional providers will NOT be held.

The Department of Health Care Services (DHCS) will hold reimbursement to the following Medi-Cal institutional providers:

• Adult Day Health Care Centers
• Assistive Device and Sick Room Supply Dealers
• Blood Banks
• Clinical Laboratories
• Fabricating Optical Laboratory/Prison Industry Authority
• Home Health Agencies
• Community Hospital Outpatient Departments
• Community Hospital Inpatient (with the exception of designated public hospitals)
• Long-Term Care (LTC) facilities
• Pediatric Subacute Care – LTC
• Ground Medical Transportation
• Genetic Disease Testing
• Air Ambulance Transportation Services
• Certified Hospice Service per Assembly Bill 4249
• Home and Community Based Services Nursing Facilities
• Mental Health Inpatient
• County Hospital Inpatient (with the exception of designated public hospitals)
• County Hospital Outpatient
• Multipurpose Senior Services Program
• Residential Care Facilities for the Elderly

The following institutional providers are exempt from the temporary payment withhold:

• Indian Health Clinics
• Rural Health Clinics
• Federally Qualified Health Centers
• Free Clinics
• Community Clinics
• Chronic Dialysis Clinics
• Multi-Specialty Clinics
• Surgical Clinics
• Exempt from Licensure Clinics
• Rehabilitation Clinics
• County Clinics Not Associated with a Hospital
• Birthing Centers – Primary Care Clinics
• Clinic Otherwise Undesignated
• Alternate Birthing Centers – Specialty Clinics
• Expanded Access to Primary Care Clinics
• Designated Public Hospitals
• Local Education Agencies

Please note that the list above is limited to providers whose claims are processed by the ACS, the Medi-Cal fiscal intermediary.

Med-Pro was established in 1985.

Providers of health care are under growing pressure from insurance companies, managed care organizations, and the government. Consequently, health care providers throughout the nation are redesigning structures and processes in order to remain economically viable and gain market share.  Coupled with decreasing profit margins and continuous mergers within the health care industry, it has become overly easy for health care providers to have mistakenly mal-aligned themselves with the demands of the market.

With over 25 years of experience in the business of health care, Med-Pro is in the forefront of the health industry transformation, and can help poise your practice for the dawn of the new era through innovative strategies and sound business advice.

PROVIDER NAME: Palmetto GBA, LLC – A/B MAC JURISDICTION 1

PROVIDER SERVICE AREA: California, Hawaii, Nevada, American Samoa, Guam, and Northern Mariana Islands

J1 MAC PROJECT OFFICER: Jim Massa, 303-844-7053
J1 MAC CONTRACTING OFFICER: Cathy Baldwin, 410-786-5131
J1 MAC CONTRACT SPECIALIST: Brenda Clark, 410-786-5165

Bruce W. Hughes
President & Chief Operating Officer
17 Technology Circle
Mail Code: AG-A03
Columbia, SC 29203-9511
Phone: 803-763-7130 Fax: 803-935-0081

Mike Barlow, Vice President
J1 Program Manager
4249 Easton Way, Suite 400
Columbus, Ohio 43219
Phone: 614-473-6400 Phone: 803-763-7555

Dickie Butler, Vice President
Medicare Systems/EDI
Phone: 803-763-1077
Fax: 803-935-1411

Joe Wright, Vice President
Chief Financial Officer
Phone: 803-763-5544 Fax: 803-763-0176

Ray Blair, Compliance Officer
Phone: 803-763-8143 Fax: 803-763-7115

Larry Leslie, Contract Admin.
Phone: 803-763-4351 Fax: 803-935-0207

PARENT COMPANY: Blue Cross Blue Shield of South Carolina

Data as of May 31, 2010

Every year, California faces a budget deficit, and to close that widening gap, programs are cut and services are slashed. Medi-Cal is a program that is constantly targeted, and proposals always seem to include reducing reimbursement rates for physicians as a short-term solution.

Physicians should continue to unite and fight against such reductions.

Kaiser State Health Facts lists California as the lowest reimbursed state in the nation.

Notes:     
Spending includes both state and federal payments to Medicaid. These figures represent the average (mean) level of payments across all Medicaid enrollees. Spending per enrollee does not include disproportionate share hospital payments (DSH).

Some enrollees are only eligible for a limited set of benefits. A small fraction of elderly and disabled enrollees in every state qualify only for assistance with their Medicare premiums and coinsurance. In 2004, a few states also had waivers that allowed them to enroll relatively large numbers of people in Medicaid-funded programs for family planning-related services or prescription drug coverage.

Sources:     
The Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on data from Medicaid Statistical Information System (MSIS) and CMS-64 reports from the Centers for Medicare and Medicaid Services (CMS), 2011.

Definitions:     
Enrollees: Individuals who participate in Medicaid for any length of time during the federal fiscal year. They may not actually use any services during this period, but they are reported as enrolled in the program and are eligible to receive services in at least one month. Enrollees are presumed to be unduplicated (each person is only counted once).

Federal Fiscal Year: Unless otherwise noted, years preceded by “FY” on statehealthfacts.org refer to the Federal Fiscal Year, which runs from October 1 through September 30. For example, FY 2009 refers to the period from October 1, 2008 through September 30, 2009.

]]> http://www.medpromanagement.com/2012/02/01/judge-blocks-states-medi-cal-cut-final-ruling/feed/ 0 http://www.medpromanagement.com/2012/01/11/ncci-guidelines/ http://www.medpromanagement.com/2012/01/11/ncci-guidelines/#comments Thu, 12 Jan 2012 00:07:29 +0000 Med-Pro Management, Inc. http://www.medpromanagement.com/?p=1235 The National Correct Coding Initiative (NCCI) – also known as CCI – was implemented to promote correct coding and to control improper coding leading to inappropriate payment.

There are two NCCI code pair edit tables:

• Column 1/Column 2 Correct Coding Edit Table
• Mutually Exclusive Edit Codes (MEC) Edit Table

…and another set of edits known as:

• Medically Unlikely Edits (MUEs)

The code pair edits have two columns. The second column in both the code pair edits represents the codes included in the first column, therefore, Column 2 codes are not payable with Column 1 when both services are performed on the same day by the same healthcare provider.

As always, there are exceptions to the above rules.  For instance, additional two digit codes – modifiers – could be added to service codes to further describe services and to bypass NCCI edits.

Consequently, MUEs are edits used to indicate the maximum number of Unites of Service (UOS) allowed for a single beneficiary on a single date of service.

Column 1/Column 2 and MEC Tables

Figure 1 shows the screen for the NCCI Edit for physician services.

Figure 1

Figure 2 shows the screen that appears when “Surgery: Musculoskeletal System” is selected as depicted in Figure 1 above. Notice that there are two tables of edit pairs which appear compressed zipped files.

Figure 2

FYI

“Mutually Exclusive” code pairs (see red box in Figure 2) are codes that cannot possibly be performed at the same anatomic site or at the same patient encounter. For example, a service reported as an initial service at the same time reported as a subsequent service.

How to use the Column 1/Column 2 and MEC tables?

To identify a reimbursable service, search for a service code in Column 1 and also look for other service codes in Column 2. Services listed in Column 2 are inclusive to Column 1 and, therefore, not reimbursed.

Figures 3 shows part of the column 1/Column 2 table for the “Medicine Evaluation and Management Services”. In the example below, service code 99215 (Office or Other Outpatient Visit) is selected.

Figure 3

The service code, G0102 (Prostate Cancer Screening; Digital Rectal Examination), listed in Column 2 will not be reimbursed together with 99215 listed in Column 1.

In Figure 3, item 6 indicates is modifiers (0, 1, or 9) could be used for the Column 1 codes. Modifiers are 2-digit codes that are appended to service code to further explain the service codes. Appropriate modifiers used could bypass the edits and codes may be reimbursed.

The following table provides the definition of each of these indicators:

Modifier Indicator Table

The following modifiers may be used – under appropriate clinical circumstances – to bypass an NCCI edit:

• Anatomic modifiers: E1-E4, FA, F1-F9, TA, T1-T9, LT, RT, LC, LD, RC
• Global surgery modifiers: 25, 58, 78, 79
• Other modifiers: 27, 59, 91

Figure 4 shows the service code 99435 in Column 2 is an unlikely service code to be used with 99215 in Column 1.

Medically Unlikely Edits (MUEs)

On January 1, 2007, the CMS developed MUEs to reduce the paid claims error rate for Part B (i.e. physician services) claims.  An MUE is the maximum number of units of service (UOS) allowed for a provider for a single patient on a single date of service.

Figure 5 shows the link to MUEs and the downloadable files for physicians and outpatient facilities.

Figure 5

The following are examples of some of the considerations that limit units of service:

• Anatomic structures e.g. removal of appendix could only be done one time
• Bilateral surgery e.g. service descriptors that indicate “bilateral” will be reimbursed as one unit
• Type of equipment e.g. wheelchair or cochlear implant would be utilized only once

A denial of service due to an NCCI code edit pairs MUE is a coding denial, not a medical necessity denial. Therefore, a provider cannot bill the beneficiary for an MUE denial and an Advanced Beneficiary Notice of Noncoverage (ABN) cannot be utilized.

Figure 6 shows a section of the Practitioner Services MUE table after selecting the Microsoft Excel format.

Figure 6

Frequently Asked Questions

Q: How to determine when a code is reimbursable under NCCI code pairs?

A: Search Column 1 for the service code in both Column1/Column2 and MEC tables. Any service code listed on Column 2 corresponding to your code in Column 1, is inclusive, and, therefore, not separately reimbursable.

Q: How often are the NCCI codes updated by CMS?

A: CMS updates the NCCI codes every quarter. For this reason, downloaded and saved tables on your PC must be replaced in order to have the most current information.

Q: How would you identify service codes that are not reimbursable or inclusive?

A: Locate the service code in Column 2 and link to the the corresponding codes in Column 1. This is the reverse of the process described in the above article.

 

RESOURCES

NCCI FAQs

MUE FAQs

MLN Matters Articles

Fee Schedule ]]>

Medicare offers several ACO programs, including:

• Medicare Shared Savings Program – a fee-for-service program
• Advance Payment Initiative – for certain eligible providers in the Shared Savings Program
• Pioneer ACO Model – population-based payment initiative for health care organizations and providers already experienced in coordinating care for patients across care settings

The following is how CMS defines ACOs:

ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve. Coordinated care helps ensure that patients, especially the chronically ill, get the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.

On December 19, 2011, CMS selected 32 organizations from a large pool of applicants to start January 1, 2012:

Of the 32 participating organizations, 6 are from California. These are listed below:

HealthCare Partners Medical Group

• Classification: Independent Practice Association (IPA)
• Service Area: Los Angeles and Orange Counties, California
• Website: www.healthcarepartners.com

Monarch Healthcare

• Classification: Independent Practice Association (IPA)
• Service Area: Orange County, CA
• Website: www.monarchhealthcare.com

Sharp Healthcare System

• Classification: Integrated Health System
• Service Area: San Diego County
• Website: http://www.sharp.com

PrimeCare Medical Network

• Classification: Medical Groups and Independent Practice Associations (IPAs)
• Service Area: Southern California (San Bernadino and Riverside Counties)
• Website: http://www.primecare.com/

Brown & Toland Physicians

• Classification: Independent Practice Association (IPA)
• Service Area: San Francisco Bay Area, CA
• Website: www.brownandtoland.com

Heritage California ACO

• Classification: Independent Practice Association (IPA)
• Service Area: Southern, Central and Coastal California
• Website: www.heritagemed.com

Watch a brief video about ACOs as explained by Don Berwick, the former CMS administrator:

Urgent care centers typically treat a wide range of injuries and illnesses — including coughs and colds, broken bones, cuts and back pain— and do blood and urine tests, X-rays and even drug testing.  They see patients without an appointment and often are open evenings and weekends.

These centers are similar to the retail health clinics that have been opening up in department stores with one important distinction. Retail clinics employ nurse practitioners, urgent care centers, on the other hand, usually have physicians on site.

The rise in urgent care centers has made some physicians to be concerned, both for clinical and financial reasons. When patients bypass their personal physicians, their medical data is stored at the urgent care centers. Their medical information is not being monitored by their own personal physician.  No relationship with a doctor is a predictor of negative health outcomes in the long run.  In addition, no patients means no income for the physicians.  In response, doctors are considering adding evening and weekend hours and leaving more room on the schedule for same-day appointments. These are the same reasons that patients end up at an urgent care.

Reference: Kaiser Health News

1. What the Federal Anti-Kickback Statutes prohibit?
2. What are the penalties under the law?
3. What type of programs does the law cover?
4. What are safe-harbors?

Watch the video to learn more about Federal Anti-Kickback Statute