CMS revised the 2010 conversion factor lower by about half a penny after factoring payment formula changes to the Medicare Physician Fee Schedule.
The new conversion factor for this year is $36.0791, which is just 0.015% lower than the current rate of $36.0846. This is the result of relative value unit (RVU) corrections to the fee schedule and physician reimbursement formula changes mandated by the new health care reform law.
One reform change in the Patient Protection and Affordable Care Act (PPACA) required CMS to raise payments for physician practice expenses currently being paid below the national rate. As a result, physicians in low-cost states (such as South Carolina and Mississippi) will get higher pay.
The conversion factor was lowered to offset changes to the fee schedule. The changes are supposed to be budget neutral.
Physicians won't immediately see changes to Medicare payments. CMS instructed Medicare contractors to hold off on making adjustments until further notice.
We'll have more on this change in the next issue of Part B News and on www.partbnews.com later in the week.
Update: Here's the transmittal announcing the update to the conversion factor (PDF).