The Senate late Tuesday, Dec 18th passed the Medicare, Medicaid and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007 (S. 2499).
Today the House of Representatives also passed the bill which replaces the 10.1 percent reduction in Medicare Part B payments scheduled for 2008 with a six-month, 0.5 percent increase.
The President is expected to sign this bill into law. Physicians will face a payment reduction in Part B payments in July 2008 unless Congress once again intervenes.
However, keep in mind that this increase really means that practices will experience an overall decrease. Frank Cohen, our CMPA partner (see this link), pointed out the following:
I checked with an analyst at CMS and he assured me that, irrespective of the outcome in today’s vote on the CF for 2008, the BNA work reduction factor will be applied. How it works is this:
When calculating the MFS allowable amount, the work RVU is first multiplied by 0.8806, rounded to two decimals and then multiplied by the work GPCI. The work RVU makes up around 53% of the total RVU value for a procedure (a lot more for E/M procedures). Factoring the work RVU by 0.8806, in effect, reduces the value of that component by around 12%. If the work RVU makes up 50% of the total RVU value, it reduces the MFS allowable for that code by 6%. If the work RVU is 75% (as in several of the E/M codes), it reduces the MFS value of the code by 9%. Either way, whatever the CF turns out to be, it is hiding a reduction overall. Let’s say that they increase the CF to 38.08 this year. That is an increase of 0.48%. Even in the best case, this still results in a 5.5% decrease in what the MFS allowable should be.
Frank Cohen
If you have a contract with a payor, other than Medicare, that is based upon RBRVS, make sure that this reduction factor is not used when they calculate your payment.
If the contract is based upon the Medicare fee schedule (check the wording in your contract), you may want to renegotiate the contract.
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