Every November, Medicare is required to publish its final rule for payment of physicians for the next calendar year. The regulations guiding the Centers for Medicare & Medicaid Services for the establishment of the 2008 physician fee schedule remain unchanged for the most part.
The sustainable growth rate and the resource-based relative value scale update schedule limit the number of changes that can be made to the relative values and fix the budget calculation for the development of a conversion factor determining reimbursement rates for the next year. Space does not allow us to address all of the issues related to the final rule in depth, so this article will touch on many important issues specific to urology. The final rule can be viewed at:
http://www.cms.hhs.gov/PhysicianFeeSched/PFSFRN/list.asp?listpage=2
The final rule establishes the conversion factor for 2008 at $34.0682, representing a decrease of 10.1% compared to the current value. Of course, we all hope that Congress will again stop this reduction as it has for the past 3 years. The conversion factor freezes of the last 3 years, celebrated as victories for physicians, are only partial wins because, while a freeze stops the reduction, it does not keep up with inflation.
Of note as well is the continued use of the budget neutrality (BN) adjustment multiplied by the work value, and the continued phase-in of the new practice expense values. 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 BN adjustment is one that potentially can be avoided in the private sector fee schedule negotiations. The formula for fee schedule calculation for 2008 will include multiplying the work value by the BN prior to geographic adjustment. The overall impact from the BN compared to current year rates will be minor compared to the conversion factor reduction.
The practice expense phase-in will affect 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.
Under CPT, the phone calls for patient care have been revised into three separate codes with specific times: 99441, 5 to 10 minutes, $12; 99442, 11 to 21 minutes, $22.65; and 99443, 21 to 30 minutes, $33.44. If you calculate this, your time on the telephone to a patient is valued at approximately $67 per hour.
Even with established values for these phone service CPT codes, Medicare considers them to be non-covered services and will not pay for these codes. It has placed a very low price on your time, and, if paid by the private sector, this probably will be a key payment consideration. This is something we all ought to ask our representatives to the Relative Value Update Committee to really fight. Our time is worth more than $67 per hour.
CPT now includes a code for online E&M services (99444). However, Medicare has chosen not to value this code and also considers this to be a bundled service, blocking payment for this service as well. Note: Non-covered services may be billed to the patient without first obtaining an Advance Beneficiary Notice. We continue to check with Medicare regarding the potential to bill patients directly for phone calls and Internet E&M services.
Anti-markup provision
In the new Medicare rules, 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 (TC) and the professional component (PC) 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 the 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.
Some specific examples that CMS gave:
A group practice contracts with the leasing company that supplies both a technician and a pathologist to perform testing on prostate samples. The technician performs the tissue sampling and the pathologist reviews the slides. All work is done outside of the office of the billing practice group in space that is rented exclusively 24/7 by the group practice. In that setting, the anti-markup provisions will apply.
Similar to the previous example, except the TC and PC are performed by the group’s employee technician and pathologist, who are the independent contractors of the group housed outside the office where patients are seen. The anti-markup provision still applies.
A physician in a group orders a test and a technician who is a part-time employee of the group performs the test in the group’s office. A physician who is an independent contractor of the group performs the PC in the group’s office and reassigns his or her right to payment to the group billing for the service. The anti-markup provision does not apply.
It is important to note that, although the examples provided by CMS seem to focus on pathology, imaging services and centers are also included in the reference. Further, it should be noted that the information included here does not include all the nuances of the rule. You may wish to consult expert counsel if you have arrangements for pathology and imaging services that may be subject to the anti-markup provision.
PQRI continues in 2008
Last, the Physician Quality Reporting Initiative (PQRI) continues for 2008. CMS did not initiate significant changes to the overall parameters for PQRI, so it is anticipated that physicians participating in PQRI and meeting the minimum requirements will receive a 1.5% bonus based on allowed amounts for all traditional Medicare payments made in the 2008 calendar year. Payments will be made to qualified providers in 2009 in a lump sum. CMS can add measures to the existing measure. Participation is encouraged, and many have developed systems that make compliance with the PQRI program relatively painless.
In all, the final rule 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. Many of the problems with the payment system for physicians require legislative change. For these issues, the only way to truly effect change in the system is to get involved politically.
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.
Disclaimer:
The information in this column is designed to be authoritative, and every effort has been made to ensure its accuracy at the time it was written. However, readers are encouraged to check with their individual carrier or private payers for updates and to confirm that this information conforms to their specific rules.
