CMS has not only dropped the conversion factor it uses to calculate Medicare payments for this year, but the agency has altered the relative value units (RVUs) for thousands of codes used to pay for physician services.
Medicare billing expert Frank Cohen found 4,094 code groups had reductions in RVUs and 2,364 resulted in a net increases after CMS recently updated the Medicare Physician Fee Schedule database. We're still reviewing all of the updates, but we know the changes will have a negative impact for some physicians billing office visits.
Example: The national payment rate for 99213 (office visit, established) had been $65.67 earlier this year, but will now pay $65.30. 99214 had paid $98.51, but now pays $97.77.
However, CMS has also made Geographic Practice Cost Index (GPCI) adjustments mandated by the health care reform bill signed into law earlier this year. These adjustments could negate any losses, depending on where the physician practices.
GPCIs adjust the value of three components -- work, practice expense (PE), and malpractice (MP) -- of a service used to calculate Medicare provider payments. The reform law altered the GPCIs by re-established a minimum work GPCI floor value of 1, which had expired Dec. 31, 2009. The law also increases PE GPCIs with values under 1. The GPCI changes, along with the RVU adjustments, are retroactive to Jan. 1.
Here's a breakdown of the GPCI changes (PDF). You see areas of the country with work and PE GPCI values at or above 1 (examples are Boston, New York, Los Angeles) were not affected by the reform law. Areas with work and PE values under 1 (examples are the states of Alabama, Tennessee and Oregon, not including Portland) were increased. In general, a locale with higher GPCI values means providers in those locales will receive higher pay for services.