The final rule established the conversion factor for 2008 at $34.0682, representing a decrease of 10.1%. Then in late December, Congress passed a law increasing the conversion factor for physicians for the first 6 months of 2008 by 0.5%, therefore averting the 10.1% decrease that was planned. This gives Congress another 6 months to put a fix to the problem. If congress does not step in again the conversion factor on July 1st will revert to the proposed number of $34.0682.
Why the slight increase? Primarily the .5% increase on the face of it is a why bother increase. The slight conversion factor bump is actually yet another move to keep physicians reimbursement flat. The small increase was enacted to offset the budget neutrality (BN) adjustment. The BN is multiplied by the work value. The BN has been changed this year to increase the overall reduction of the work value for Medicare payments from 10.1% (.8994) in 2007 to 11.94% (.8806) in 2008. The .5% increase neutralizes this BN effect.
However, the practice expense phase-in will impact urology most notably with the continued reduction of fees for in-office services such as BPH therapies (~ –10%), cystoscopy surgeries (~ –5%), LHRH injection fee (~ –6%), and catheterization services (~ –3%). Note that a diagnostic cystoscopy and retrograde are not affected by the decrease, and the LHRH injection does not apply to the drug, which is reimbursed under a separate fee schedule. However, it is worth taking a quick look at the fee schedule comparing last year and this year to note your high volume procedures and reimbursement changes if any.
The December law also set aside funding of 1.5% for the Physician Quality Reporting Initiative (PQRI) reporting beyond 2008 to 2009 and mandated the program for 2013. Stay tuned to UPT for solutions to implementing PQRI in you office.
Finally two other changes were made to the payment system with the December change. First, the Geographic Cost of Practice Index floor was extended for the same 6-month period the conversion factor raise is in effect. Second, the 5% bonus for physician scarcity areas was also extended for the same time period.
Even though the fee schedule changes for Medicare are enough to boggle the mind, Medicare has chosen to enforce its recommended changes regarding physician referral rules related to diagnostic tests. Specifically, Medicare has implemented the rule that a practice cannot charge more to Medicare for a service than the practice is “charged” by a pod lab, imaging center, or a similar entity. The “anti-markup provision” includes both the technical component and the professional component of diagnostic tests that are either purchased from a separate entity or are performed at a site other than the office of the billing physician, and billed by the physician or group that is ordering the test. ”Charges” to the office also include provisions to prevent an office from leasing or otherwise charging the entity for supplies or services to an outside service provider under this anti-markup provision.
In other words, a rented office or a part-time office where patients are not seen by the billing physician is subject to the anti-markup provision, and no profit will be available for the office. If the service is performed in the office where patients are seen and the diagnostic test is not purchased on a per-service basis, even if a part-time employee or a contract physician is providing the service, an office can bill Medicare standard fees and be reimbursed Medicare fee schedule rates regardless of cost.
For those services for which the anti-markup provision applies, Medicare will pay the lesser of these three amounts: the cost of the services by the practice, the amount billed to Medicare, or the Medicare fee schedule allowable.
CPT changes for this year were minimal. One still needs to review auacodingtoday.com for all the changed information, the site held all the changes from Medicare as soon as the information became available.
On interesting tidbit we noticed when review changes for CPT and Medicare surrounds the new CPT codes for phone calls and on-line service. Codes 99441-99444 have been inserted into CPT for 2008. Medicare elected not to label these services as “bundled” status codes, instead they are listed as “non-covered” services. This small change opens the door for reimbursement for these services. Medicare will not pay. Others may or may not allow these codes to be billed or reimbursed and will be governed by contract. For Medicare patients you may bill the patient directly for these phone and internet services with having a pre-signed ABN or other agreement. However, we do recommend something in writing notifying patients of the bills they are about receive.
Even with the December revision, Medicare reimbursement for 2008 holds little in the form of great news for urologists. Some will be required to make changes in their existing practice model or, at the very least, change their fees for some services. Most felt these changes were inevitable, given that CMS and others believe that physician behavior is significantly influenced by reimbursement. While the current trends for reimbursement continue to look bleak, there is hope. Urology is still a specialty that will see increased demand, and technology for clinical and administrative duties will provide new revenue opportunities as well as opportunities for cutting costs in the office. It is not time to throw in the towel, but time to rethink your practice and embrace the changed environment through automation, adaptation, and political activism.
