Medical Coding Outsourcing

Medicare Part B Primary Care

The Centers for Medicare and Medicaid Services has released updates to their different Medicare payment systems. In a recent move, CMS published the final rules for Hospital Outpatient Prospective Payment System (HOPPS) and the Medicare Physician Fee Schedule (MPFS), within a day of each other. The detailed summary of 2017 Medicare Physician Fee Schedule Final Rule is posted on: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule

A small increase to the 2017 MPFS Conversion Factor (CF) has been finalized by CMS, even though they had initially proposed a small reduction. Apart from that, CMS is now including a 0.9-cent increase in the payments for each of the Relative Value Unit (RVU) that are assigned to a medical service.

Medicare assigns a unit value to each of the medical services based on the practice expense, medical malpractice, and physician work involved in the service. The RVUs of the service are then multiplied by the Conversion Factor together with some other adjustments to find the appropriate Medicare reimbursement for the medical services.

Reports say that the Conversion Factor for 2017 has many Congressionally-mandated adjustments. One such amendment is a downward adjustment for multiple procedure payment reduction (MPPR) for some of the imaging services. Congress wanted CMS to decrease the professional component payments when the same physician (or physicians in the same group practice) gives many imaging procedures to same patient, in the same session, on the same day. This is because there will be an overlap for resources when many images are taken.

Professional Medical Billing

Multiple Procedure Payment Reduction

Originally, the payment for images except the initial image was required to be decreased by 25 percent, which was reduced to 5 percent by the Congress. However, Congress also needed the reduction to be budget neutral. This means that the CF would have to be adjusted to account for the increase in the medical spending due to lower reduction under MPPR.

Together with the adjustments to the RVUs and CF, CMS also makes use of MPFS to make other changes in the reimbursement policy. For instance, the agency is making many additions to how primary care can be coded to separate care management from the traditional Evaluation and Management (EM) coding.

It is evident that the HOPPS final rule will affect services that are provided in Ambulatory Surgical Centers (ASC) and in Hospital Outpatient Departments (HOPD). CMS is expecting a 1.7% increase in payment for the hospitals that are paid under the HOPPS, and 1.9% increase for ASCs in 2017.