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Medicare fee schedule contains 4.4% cut for 2003
It’s official. The long-predicted reduction in payment will become effective in March, unless Congress acts quickly.
WASHINGTON — The much-anticipated 2003 Medicare Part B fee schedule was released by the Centers for Medicare and Medicaid Services on December 31. As expected, the final rule will implement a 4.4% reduction in reimbursement for all services paid on the fee schedule. The conversion factor was reduced from $36.1992 in 2002 to $34.5920 for 2003.
The payment update will become effective March 1, unless Congress takes final action to fix the statutory formula for calculating the annual Medicare budget within its first few weeks of business.
(At press time, Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, introduced a joint resolution that would freeze implementation of the 2003 fee schedule and maintain reimbursement at 2002 levels for 1 year. If enacted, this would give Congress an opportunity to review and revise the conversion factor formula.)
Ophthalmologists face an additional 1% reduction in payment for many services due to changes in work and practice expense relative value units (RVUs) assigned to certain ophthalmology CPT codes.
The 4.4% cut
Since release of the 2002 fee schedule, which included a 5.4% reduction in the conversion factor from 2001 levels, another dramatic cut in the conversion factor for 2003 has been predicted.
The reduction is the result of several factors, most significantly the use of inaccurate estimates in Medicare beneficiary growth and inflation for several years, application of a productivity index that was inappropriate for professional services, use of a Congressionally mandated formula to calculate permissible annual Medicare growth that is tied to the nation’s gross national product and use of a behavioral offset by CMS to account for an anticipated (but unknown) increase in the volume and intensity of services billed by physicians to make up for decreases in reimbursement.
Over the past year, an interdisciplinary coalition of health care professionals has been urging Congress and the administration to address the expected fee schedule cut. Specifically, physicians and others have been pushing for legislation that would change the conversion factor formula or, at a minimum, enable CMS to revise certain flaws in the estimates used to establish the sustainable growth rate (SGR) for 1998 and 1999 and the Medicare volume performance standards (MVPS) for 1990 to 1996.
Despite favorable action by the House, the Senate closed its session in December without passing a similar measure. This left CMS with no option but to release the already delayed fee schedule with the devastating cut.
The final rule addresses the criticism of the productivity index by adjusting the index used to calculate the Medicare economic index (MEI) to one that more accurately captures the ability of professionals to increase productivity. This change alone limited the cut to 4.4%, rather than the 5.1% that would have resulted without the modification.
Ophthalmologists have until March 1 if they wish to try to influence congress on the slated Medicare payment cut.
Other changes
The final rule also institutes other payment policies noteworthy for ophthalmology. For example, CMS agreed to adjust the Clinical Practice Expert Panel data for five CPT codes: 67820, 67825, 65220, 92081 and 92083. According to at least one commenter, “rank order anomalies” existed in three families of ophthalmology codes because only certain services in these families had been through a refinement process. Therefore, the practice expense RVUs for certain codes were arbitrarily low, while others accounted for inaccurate resource utilization.
In response, CMS agreed to use the same supply list and clinical staff times assigned to CPT code 65222 for code 65220 (removal of foreign body from eye). For CPT codes 92081 and 92083 (visual field examination), CMS used the same supply list as that for 92082 and increased the clinical staff time for 92081 to 35 minutes and for 92083 to 70 minutes. Consequently, the practice expense RVUs for these services increased for 2003.
CMS also announced that 20 services currently billed using G codes will be transitioned to category 3 CPT codes. These include codes G0185 and G0186, which are used to describe thermotherapy and photocoagulation treatment of choroidal vascular lesions, respectively. Thus, services formerly coded with G0185 must now be billed using CPT code 0016T, and those described by G0186 must be billed using CPT code 0017T.
Finally, ophthalmology practices providing or considering telehealth services will benefit from CMS’s decision to consider a regular annual update to the list of approved telehealth procedures. Now, individual providers or organizations from the private or public sectors may submit requests to CMS for particular services to be added or deleted from the telehealth list. Requests must be received by CMS no later than December 31 of the year prior to the year of the fee schedule to which the change would be applicable. In other words, requests submitted by Dec. 31, 2003 would be considered for the fee schedule effective in 2004.
Designated health services
This year no services were added to or deleted from the list of services that trigger the self-referral prohibition. Changes were limited to those necessary to conform the list to coding changes reflected in the most recent CPT and Healthcare Common Procedure Coding System codes.
CMS is accepting comments on sections of the rule until Feb. 28. The final rule can be accessed at the CMS Web site.
For Your Information:
- Allison Weber Shuren, MSN, JD, can be reached at Arent Fox Kintner Plotkin & Kahn, PLLC, 1050 Connecticut Ave. NW, Washington DC 20036; (202) 775-5712; fax: (202) 857-6395.
- The final rule can be accessed at the Web site of the Center for Medicare and Medicaid Services: www.cms.gov/REGULATIONS/PFS/.