The nation's economy has had its ups and downs, particularly in the last few months, with little sign of change in the coming year. Medicare payments have also seen some significant changes in the last few years, and next year will be no exception. The 2009 Medicare Physician Fee Schedule final rule has been published in the Federal Register. This article will discuss the high points of the payment changes contained in the final rule. For urologists, the overall change will be minimal, although reimbursement for certain procedures will be affected significantly.
We are unable to discuss a number of key issues in detail due to space limitations. Hopefully, the information below will provide you with a framework for understanding the changes.
The conversion factor for 2009 will be $36.0666, compared to $38.0870 in 2008. This reflects the 1.1% increase in Medicare physician payments passed last July as part of the Medicare Improvement for Patients and Physicians Act. The law, which Congress passed over President Bush's veto, also eliminated a 10.6% cut in payments for 2008 as well as a 5.4% projected cut for 2009.
You are not alone in questioning whether these conversion factor numbers are correct. In fact, they are. The reason that the 2009 conversion factor is lower than this year's is somewhat complex.
The change will affect each urology practice differently, depending on its case mix. The formula used by the Centers for Medicare & Medicaid Services to calculate the conversion factor included three adjustments.
The first adjustment used was the mandated 1.1% increase. In addition, a decrease of 6.41% was applied to the conversion factor. The decrease in the conversion factor was determined by weighing the impact of budget neutrality on the work value, compared to the total budget allocation. You may recall that the budget neutrality adjustment for the work value is currently 11.94%. Medicare determined the overall value of the work value without budget-neutral adjustment and compared it to the total budget. Remember that the work relative value unit comprises more than half of the total value for many services provided in the office.
After this was applied, a second increase of .8% was then applied. This adjustment was calculated after applying the impact of removing the work adjustment factor used for 2008 and projecting the Medicare budget with the newly adjusted conversion factor. This adjustment had to be included, as many technical component (TC) codes included in the Medicare Part B budget calculation have a work value of 0. For these services, the 2008 and 2009 total values are equal, resulting in a projected savings to Medicare of about .8%.
The overall impact on urology is estimated to be 0%. However, within this framework of change, there are some big losers and some winners.
E&M, surgery, pathology payments
The payments for the main E&M codes used by urologists, consults, and both new and established patients, will increase overall by about 1.5%. The biggest losers are certain office procedures. For example, payment for 52214 (cystourethroscopy, with fulguration [including cryosurgery or laser surgery] of trigone, bladder neck, prostatic fossa, urethra, or periurethral glands) performed in the office will decrease by 52%. Cystoscopy in the office will see a very slight payment increase, microwave of the prostate will decrease by approximately 17.4%, and urodynamics will drop by approximately 7%.
The larger payment decreases are the result of the continued phase-in of the 5-year revision to the practice expense value we have previously addressed. These decreases are often multiplied by the impact of changing the budget neutrality from a work value adjustment to a conversion factor adjustment. As a general trend, any service whose relative weight for the practice expense is significantly higher than its work value will be impacted negatively.