Medicare yearly conversion factor - 1992 - 2010

The Medicare conversion factor

The Medicare conversion factor is a scaling factor that converts the geographically adjusted number of relative value units (RVUs) for each service in the Medicare physician payment schedule into a dollar payment amount. The initial Medicare conversion factor was set at $31.001 in 1992. Subsequent conversion factor updates have been based on three factors:

•    The Medicare economic index
•    An expenditure target “performance adjustment”
•    Miscellaneous adjustments including those for “budget neutrality”



History of Medicare Conversion Factors

 

Year	Conversion Factor	% Change	Primary Care Conversion Factor	% Change	Surgical Care Conversion Factor	% Change	Other Nonsurgical Conversion Factor	% Change
1992	$31.0010		N/A		N/A		N/A
1993	N/A				$31.9620		$31.2490
1994	N/A		$33.7180		$35.1580	10.0	$32.9050	5.3
1995	N/A		$36.3820	7.9	$39.4470	12.2	$34.6160	5.2
1996	N/A		$35.4173	-2.7	$40.7986	3.4	$34.6293	0.0
1997	N/A		$35.7671	1.0	$40.9603	0.4	$33.8454	-2.3
1998	$36.6873
1999	$34.7315	-5.3
2000	$36.6137	5.4
2001	$38.2581	4.5
2002	$36.1992	-5.4
2003	$36.7856	1.6
2004	$37.3374	1.5
2005	$37.8975	1.5
2006	$37.8975	0.0
2007	$37.8975	0.0
2008	$38.0870	0.5
2009	$36.0666	-5.3
2010	$36.0791*	0.0

Initially, the Medicare Physician Payment Schedule included distinct conversion factors for various categories of services. In 1998, a single conversion factor was offset by elimination of the work adjustor and increases in the practice expense and PLI RVUs. The reduction in the 2009 conversion factor was offset by elimination of the work adjustor from the third Five-Year
Review.

Medicare payment calculation formula

The formula for calculating the payment schedule

The Omnibus Budget Reconciliation Act of 1989 (OBRA 89) geographic adjustment provision requires all three components of the relative value for a service—physician work relative value units (RVUs), practice expense RVUs, and professional liability insurance (PLI) RVUs—to be adjusted by the corresponding GPCI for the locality. In effect, this provision increases the number of components in the payment schedule from three to the following six:

Physician work RVUs
Physician work GPCI
Practice expense RVUs
Practice expense GPCI
PLI RVUs
PLI GPCI

The formula for calculating payment schedule amounts entails adjusting RVUs, which correspond to services, by the GPCIs, which correspond to payment localities.

The general formula for calculating Medicare payment amounts for 2010 is expressed as:
     Work RVU1 x Work (GPCI)2   
+    Practice Expense (PE) RVU x PE GPCI   
+    Malpractice (PLI) RVU x PLI GPCI   
________________________________________   
     = Total RVU   
x    CY 2010 Conversion Factor of $36.0791   
________________________________________   
     = Medicare Payment   

1 The 2010 physician work, practice expenses, and malpractice RVUs may be found in Medicare RBRVS: The Physicians’ Guide.

2 The Geographic Practice Cost Index (GPCIs) for calendar year (CY) 2010 may also be found in Medicare RBRVS: The Physicians’ Guide.

what is Relative value units (RVU)

Relative Value Units (RVUs)

Resource-based practice expenses relative value units (RVUs) comprise the core of physician fees paid under Medicare Part B payment policies. The CMS provides carriers with the fee schedule RVUs for all services except the following:

Those with local codes;
Those with national codes for which national relative values have not been established;
Those requiring "By Report" payment or carrier pricing; and
Those that are not included in the definition of physician's services.

For services with national codes but for which national relative values have not been provided, carriers must establish local relative values (to be multiplied, in the carrier system, by the national CF), as appropriate, or establish a flat local payment amount.
Carriers may choose between these options.
The "Bu Report" services (with national codes or modifiers) include services with codes ending in 99, team surgery services, unusual services, pricing of the technical component for positron emission tomography reduced services, and radio nuclide codes A4641 and 79900. The status indicators of the Medicare fee schedule database identify these specific national codes and modifiers that carriers are to continue to pay on a "By Report: basis. Carriers mat not establish RVUs for them. Similarly, carriers may not establish RVUs for "By Report" services with local codes or modifiers.

Additionally, carriers do not establish fees for noncovered services or for services always bundled into another service. The MPFSDB identifies noncovered national codes and codes that are always bundled.

A. Diagnostic Procedures and Other Codes With Professional and Technical Components
For diagnostic procedure codes and other codes describing services with both professional and technical components, relative values are provided for the global service, the professional component, and the technical component. The CMS makes the determination of which HCPCS codes fall into this category.

B. No Special RVUs for Limited License Practitioners
There are no special RVUs for limited license physicians, e.g., optometrists and podiatrists. The fee schedule RVUs apply to a service regardless of whether a medical doctor, doctor of osteopathy, or limited license physician performs the service. Carriers may not restrict either physicians, independently practicing physical therapists, and/or other providers of covered services by the use of these codes.

Medicare RVU OF - color Doppler CPT 93306

Relative Value Units

1.New combined TTE/spectral Doppler/color Doppler (CPT 93306)

CMS accepted the RUC’s recommendations for the work RVUs for both the new combined TTE/spectral Doppler/color Doppler code (93306). With respect to practice expense RVUs (PE-RVUs), CMS directed the RUC to determine whether its practice expense recommendations for CPT 93306 were consistent with the inputs for the component codes (93307/93325/93320). Since the new combined code was valued as a digital service while the current component codes were not, it is unclear how this issue will be resolved.

The chart set forth as Attachment B sets forth the RVUs for all of principal echo codes paid by Medicare. With respect to CPT 93306, please note the following:

• The work RVUs for CPT 93306 are .15 W-RVUs less than the combined W-RVUs for the component codes (93320, 93325 and 93307).
• The total RVUs for the new 93306 (7.42 RVUs) is approximately 1.16 RVUs lower than the total RVUs for the component codes (8.58); however, this is in part a temporary gap, since the RVUs for the component codes will be decreasing in 2010 by approximately .75 RVUs, as the result of the transition to resource-based RVUs.

2. New combined stress test/stress echo code )(CPT code 93351)
CMS also accepted the RUC recommended W-RVUs for the new combined stress test/stress echo code (93351) of 1.75 W-RVUs. However, it substantially reduced the increased echo equipment and echo table expenses approved by the RUC, substituting less costly equipment. CMS included in the equipment list a “dual” echocardiography image viewing and reporting system, although the agency established a base unit price of $85,000 in place of the $173,000 price provided by the specialty. These practice expense inputs are subject to comment.

With respect to CPT code 93351, please note:

• The W-RVUs for 93351 are .46 W-RVUs lower than the combined work RVUs for the stress test (.75) and the stress echo (1.46).
• The practice expense RVUs for 93351 are 5.60, while the combined PE-RVUs for stress test and stress echo services are 6.11 PE RVUs. This disparity will increase somewhat next year, when the practice expense increases for the current stress echo code (93350) are fully phased in. This differential is probably attributable in part to the loss of W-RVUs for the combined procedure, since PE-RVUs are based in part on W-RVUs.

3. New contrast add-on (CPT 93352)
The total RVUs for the new add-on code for contrast administration is 1.07 RVUs, which is approximately $36. If additional payment were allowed for contrast administration in conjunction with resting echo (which seems unlikely in light of the CCI rejection of ASE’s recent request), it seems unlikely that payment would exceed this amount.

The result of the changes will be a national average payment of approximately $267 for TTE/spectral Doppler/color Doppler (CPT 93306) ; $272 for stress test/stress echo (93351) and $308 for contrast enhanced stress test/stress echo (93352). It appears that Medicare payment for resting TTE/spectral Doppler/color Doppler will be approximately $42 (1.16 RVUs )lower than it would have been if the services had not been bundled, and that Medicare payment for the stress test/stress echo will be approximately $36 (approximately one RVU) lower than it would have been had these services remained unbundled.

In other action, CMS has decided not to move forward with its proposal to require physicians’ offices to register as IDTFs, and has substantially modified its anti-markup proposal such that the anti-markup rules will not apply to any PC or TC service performed by a physician who provides at least 75% of his or her professional services through a group. A separate memo will be posted soon to address the implications of this new rule for ASE members.

I also think these CPT s are deleted CPTs please chcek further.

What is RBRVS AND RVU

Resource Based Relative Value Scale (RBRVS)

The Center for Medicare and Medicaid Services (CMS, formerly HCFA) assigns each medical procedure a:

1) relative value reflecting the physician work involved in the service (work RVU),
2) relative value reflecting the practice expense generated by the procedure (practice expense RVU), and
3) relative value representing the cost of professional liability needed to provide the service (professional liability RVU)

Physician Payment by Medicare - RBRVS, RVU

Relative value unit RVU - determines how much is paid for any service based on 3 factors:
Physician Work RVU - physician time & intensity
+ Practice Expense RVU - based on overhead
+ Malpractice cost RVU - cost of liability insurance
= Total RVU X Conversion Factor = Payment


ICD, CPT, RBRVS, RVU, GPCI
• ICD - International Classification of Diseases
• CPT - Current Procedural Terminology
• RBRVS - Resource Based Relative Value Scale
• RVU - Relative Value Unit
• GPCI - Geographic Practice Cost Index

Components of RBRVS

2010 Medicare Conversion Factor = $36.0846 $36.8729 [NOTE: On June 25, 2010, the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010” increased the 2010 Medicare conversion factor by 2.2% retroactive to June 1, 2010 through November 30, 2010.]

Additional components of theMedicare RBRVS physician fee schedule factored into the payment structure include the following:

•  MEI: The allocation of RVUs to pools for physician work, practice expense, and professional liability insurance have been revised to correspond with the Medicare Economic Index. Work is now allocated 52% of the total RVUs, practice expense is 44%, and professional liability insurance is 4%.

• HPSA: Incentive payments for physician services provided to patients in Health Professional Shortage Areas (HPSAs), which are medically underserved communities, urban and rural locations that have a documented shortage of medical professionals.

•  Nonparticipating Physicians: Reduced payments for physicians, called “nonparticipating” physicians, who do not accept Medicare “assignment.” The law sets the payment amount for nonparticipating physicians at 95% of the payment amount for participating physicians (ie, the fee schedule amount).

•  Budget Neutrality: Statutory guidelines indicate that revisions to the RVUs for physician services may not alter physician expenditures within the Medicare RBRVS physician fee schedule by more than $20 million from the principal expenditures that would have resulted if the RVU adjustments were never initiated. In 2007 and 2008, the Medicare program applied a separate budget neutrality adjustment factor to the physician work RVUs to ensure Medicare budget neutrality in light of work RVU increases tied to the 2005 Five-Year Review. However, by virtue of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), starting in 2009 CMS is required to maintain Medicare budget neutrality exclusively via annual adjustments to the Medicare Conversion Factor.

HOW TO USE THE RBRVS - Calculating CPT payment

CMS publishes RVUs for CPT codes in the Federal Register. To calculate the Medicare physician payment for a service, the RVUs for each of the three components of the Medicare RBRVS physician fee schedule are multiplied by their corresponding GPCIs to account for geographic differences in resource costs. The sum of these calculations is then multiplied by a dollar conversion factor. When determining payment, it is important to take into consideration all the mechanisms within the Medicare RBRVS physician fee schedule incorporated into the final payment for physician services. Please note that thirdparty payers other than Medicare may not use all of the elements of the RBRVS to determine physician payment. For example, they may use their own conversion factor or not factor in the GPCIs.

Example: Level 3 office visit for the evaluation and management of an established patient in Marco Island, Florida (“Rest of Florida”Medicare Locality).
[Remember that in order for the physician to code 99213, the appropriate history, physical examination, and medical decisionmaking must be documented.]

The following RVUs, GPCIs, and Medicare Conversion Factor are based on the information provided by CMS in the Federal Register on November 25, 2009.

CPT Code 99213               Location: Marco Island, Florida (“Rest of Florida”Medicare Locality)

Work RVUs                                                 0.97      Work GPCI 1.000
Non-Facility Practice Expense RVUs      0.80      Practice Expense GPCI 1.000
Professional Liability Insurance RVUs   0.05     Professional Liability Insurance GPCI 1.724

Calculating physcian payment - Using conversion factor

METHOD 1 (NON-GEOGRAPHICALLY ADJUSTED & USING NON-MEDICARE CONVERSION FACTOR)

This is an example of a physician payment mechanism in a non-facility setting that takes into consideration the total RVUs from theMedicare RBRVS but excludes all other components of the physician fee schedule. Often the total RVUs are multiplied by a payer-specific conversion factor that is not associated with the Medicare Conversion Factor.

STEP 1

Add together the physician work, non-facility practice expense, and professional liability insurance RVUs to obtain the total non-facility RVUs for the office visit.
  
                                                    Total non-facility RVUs for CPT code 99213 =
Work RVUs + Non-Facility Practice Expense RVUs + Professional Liability Insurance RVUs
                                                 (0.97) + (0.80) + (0.05) = 1.82

STEP 2
Multiply the total Medicare RVUs for CPT code 99213 by a non-Medicare, payer-specific primary care conversion factor (which may or may not be different than the 2010 Medicare Conversion Factor of $36.0846 $36.8729).

For example: Payer-specific primary care conversion factor = $38.00
Total physician payment for the provision of CPT code 99213 by this third-party payer =
                                          (Total Medicare RVUs) x (Payer CF)
                                              (1.82) x (38.00) = $69.16
Note: In some cases, payers will not use the Medicare total RVUs for a service in their calculation of physician payment. Instead, they may apply their own relative value adjustments.


METHOD 2 (GEOGRAPHICALLY ADJUSTED & USING MEDICARE CONVERSION FACTOR)

This is an example of the Medicare RBRVS physician fee schedule payment in a non-facility setting for CPT code 99213 in Marco Island, Florida. The following example assumes that a physician has accepted assignment and is practicing in an area of the country that does not have a shortage of medical professionals.

STEP 1
Multiply the physician work, non-facility practice expense, and professional liability insurance RVUs by the appropriate GPCIs; add the figures thus obtained to get the total geographically adjusted RVUs for the office visit.

Total non-facility RVUs for CPT code 99213 (geographically adjusted) =
(Work RVUs x Work GPCI) + (Non-Facility Practice Expense RVUs x Practice Expense GPCI) + (PLI RVUs x PLI GPCI)
                            (0.97 x 1.000) + (0.80 x 1.000) + (0.05 x 1.724)
                                    (0.97) + (0.80) + (0.0862) = 1.8562
STEP 2
Multiply the total geographically adjusted RVUs by the Medicare Conversion Factor to obtain the physician payment for the office visit.

                             2010 Medicare Conversion Factor (CF) = $36.0846 $36.8729
Total Medicare payment for the provision of CPT code 99213 in Marco Island, Florida =
Total geographically adjusted RVUs for CPT code 99213 x 2010 Medicare Conversion Factor
                               (1.8562 x $36.0846 $36.8729 = $64.27 $68.44)
In this example, a physician practicing in Marco Island, Florida would receive $64.27 $68.44 for providing the level 3 established patient office visit for a Medicare beneficiary.