|The US government maintains three main tables that assist in the calculation of reimbursement for services provided through the Medicare Part B (outpatient) system. These include the Resource Based Relative Value Study (RBRVS), Durable Medical Equipment (DME), and Laboratory tables. Flash Code displays the dollar value next to the code you are viewing. There is almost no overlap between the fee tables, but when there is, the highest fee is displayed. Click on the dollar amount to see additional fee information.
Here is a brief summary of each table:
RBRVS-For over 20 years medicare paid physicians on the basis of customary, prevailing, and reasonable charges (CPR) system. This system allowed significant variation in fees, was non-standard in setting fees, and had other issues that led the government to commision a study into how to improve the system. Enter Harvard university doctors Hsiao and Braun, who contracted with CMS to study how best to develop a formula for reimbursement. Here's the summary:
Each service covered under the RBRVS system has three components:
-Practice Expense value
-Malpractice risk value
The RBRVS team, with input from many interested parties, assigned a value (RVU-relative value unit) for each of these components.
Next, they determined that there were geographic differences in the costs for these values, and that these costs needed to be factored into the formula. These variations are know as Geographic Practice Cost Indexes (GPCIs or 'gypsies'). There are currently 92 recognized GPCIs in effect. Examples would be:
The overhead cost for a practice in rural Mississippi is less than downtown Manhattan
The malpractice cost for a practice in a state that has limits on jury awards (such as California) is less than a state that does not (such as Florida)
So, the RBRVS calculation looks like this:
Work value x Work GPCI=total Work RVUs
+Malpractice value x Malpractice GPCI = total Malpractice RVUs
+Practice Expense value x Practice Expense GPCI = total PE RVUs
Total RBRVS RVUs
The last component is controlled by congress. They are responsible for the purse strings for medicare expenditures. They analyze expenses from past years, then attempt to project costs into the future based on trends. Each year, they determine a Conversion Factor by which the Total RBRVS RVUs is multiplied in order to provide the final calculation for Medicare reimbursement, called the Medicare Allowable Amount. The CF varies from one year to the next as congress, with ample input from stake holders in the health care area, tries to keep a balanced medicare budget. Here's a sample screen shot.
Seems simple enough! (but wait, there's more)...
For participating physicians, Medicare will only pay 80% of the allowable amount, leaving the remaining 20% responsibility to the patient through a secondary insurance or private pay.
Physicians who choose not to participate are allowed to charge 115% of the Medicare Allowable Amount, then are paid 95% of that.
Participating Medicare physicians receive payment directly from medicare, Nonparticipating physicians have to bill the patient---who receives a check from medicare for the physician's services.
All of these calculations are included on the payment screen in Flash Code. Here's a sample.
Durable Medical Equipment. This table is used to cover primarily injections, and supplies used in patient care, as well as equipment relied on by the patient for activities of daily living. Examples of these would be: Wheelchairs, glucose measuring devices, implantable pumps, and dressing supplies. Unlike the more complex RBRVS formula, the DME table simply has a national Ceiling, Floor, and fee specific to each state.
Laboratory. This table is used to cover services provided in the laboratory section of the CPT coding system. Each year a National Limit, midpoint, and state fee amount is calculated. Note that several states are divided into sections, by carrier. These states include: California, Missouri, and New York.