If possible, contracts based on straight percentage of Medicare should be avoided.
Another change in Medicare affecting payment to some areas is the finalization of a 2-year change in the work geographic cost of practice indices. For 2007, the work value floor of 1.00 will be removed. This change will result in decreases in the work value for certain parts of the country. In fact, this will negatively affect 55 of the 93 Medicare localities.
There is an area of discrepancy in the text of the final rule with the actual values published. In the final rule, CMS indicated that indirect costs included in practice expense values would be calculated using values that were not adjusted by the BN factor. However, it appears that the indirect costs were calculated using the BN-adjusted values. At this time, it is unclear what CMS will do about this discrepancy.
In the end, CMS will do what it is required to do by Congress and the laws that govern the Medicare fee schedule. However, understanding the nuances of Medicare's adjustments will be important in private sector contracts. If possible, contracts based on straight percentage of Medicare should be avoided. However, contracts based on the most current version of the Medicare fee schedule with a more favorable conversion factor and without GPCI or BN adjustments could result in better reimbursement for your practice.
In addition to the changes in Medicare reimbursement, we felt it important to alert you to some activity regarding audits due to a rash of audit requests letters received by urologists in Florida and California. CMS uses a number of post-payment review programs to ensure the integrity of the Medicare payment system. It's important for all physicians, including urologists, to be aware of active programs.