CMS released an updated 2011 conversion factor just days before the New Year, as the last 2010 Part B News newsletter was going to press. This left us with little time and space to write much detail about how the new conversion factor, $33.9764, will impact physician payments.
The conversion factor is just one component of the Medicare payment formula. So, you shouldn't be surprised that some payments, in particular E/M codes, increased in pay despite the 2011 conversion factor dropping 7% from the 2010 rate of $36.8729.
In the 2011 Medicare Physician Fee Schedule, CMS made several relative value unit (RVU) changes. The agency increased RVUs, which are another component of the payment formula, for several codes. For example, RVUs for 99213 increased to 2.03 for 2011 from 1.81 in 2010. The RVUs increased by more than 12% and negate the conversion factor decrease.
The national payment rate for 99213 will be $68.97, up 3.3% from $66.74 in 2010.
This isn't the case for all Part B services. We'll have more analysis throughout this week.