On Feb. 28, Medicare published an update to its final rule for the 2003 Physician Fee Schedule in the Federal Register. Although surgeons will breathe a sigh of relief to learn that Medicare payments will rise (rather than, as expected, decrease) for 2003, the final rule will likely complicate billing for procedures provided during the first two months of the year. Congress Refactors the Conversion Factor As announced in the Dec. 31, 2002, Federal Register, the conversion factor that determines payment for Medicare services (relative value units as assigned by the Physician Fee Schedule X conversion factor = payment in dollars: payments are subject to regional cost adjustments) was expected to fall from $36.1992 for 2002 to $34.5920 for 2003, a reduction of about 4.4 percent. The formula by which the conversion factor is determined is set by law and cannot be changed except by congressional action (see General Surgery Coding Alert, February 2003). Fortunately, Congress acted on Feb. 13 to approve the Consolidated Appropriations Resolution 2003, which President Bush signed into law a week later. The Resolution allowed an increase in the conversion factor for 2003, which CMS has now set at $36.7856 ($0.5864 or 1.6 percent higher than the 2002 figure). The new conversion factor became effective March 1 and applies to all services provided on or after March 1. The delayed implementation of the 2003 Physician Fee Schedule has created some logistical problems for Medicare payers and providers. For example, based on the Dec. 31 final rule and as further explained by CMS Program Memorandum AB-02-181 (Change Request 2468, Dec. 23, 1992), CMS will reimburse all services provided during January and February 2003 at the 2002 rate ($36.1992). And, payers had to delay all claims containing new-for-2003 codes billed prior to implementation of the 2003 fee until March 1 because, under the 2002 fee schedule, there was no way to pay them. For instance, if the physician reported 34833 (Open iliac artery exposure with creation of conduit for delivery of infrarenal aortic or iliac endovascular prosthesis, by abdominal or retroperitoneal incision, unilateral), a new-in-2003 code, prior to March 1, the payer could not process the claim because it had no fee schedule available to establish appropriate reimbursement. As of March 1, payers should reimburse such claims without delay at the 2003 rate. Note: You may view CMS Memo AB-02-181 at
www.cms.gov/manuals/pm_trans/AB02181.pdf. And Now the Bad News Because of processing delays, not all services provided in January and February will have been settled prior to March 1. For example, the surgeon might perform a laparoscopic fundoplasty (43280) on Feb. 28 but does not submit the claim until March 3, which the payer does not settle until several [...]
