Medicare Compliance & Reimbursement

CMS knocks down conversion factor, props up RVUs for ED E/Ms.

Medicare recently firmed up its 2007 Physician Fee Schedule, and the final product holds very good news for emergency medicine practices.
 
While nearly every other specialty is expecting a leaner bottom line next year, emergency medicine should actually see more overall reimbursement in 2007. This anticipated increase has a lot to do with the new work relative value units (RVUs) for all emergency department (ED) evaluation and management (E/M) services.

"The RVUs for typical emergency medicine services are changing significantly beginning Jan. 1, with across the board increases for all levels of ED E/M," explains David McKenzie, CAE, director of reimbursement with the American College of Emergency Physicians (ACEP). In addition, emergency physicians will also see increased work RVUs for critical care services.

But the gains won on the ED E/M code RVUs will be offset by the Centers for Medicare & Medicaid Services' (CMS) decrease of the conversion factor (the rate Medicare pays per RVU), McKenzie explains. Here's a look at what the new Physician Fee Schedule holds for your ED.

Level 2 E/M Worth 60 Percent More This Year

While some ED codes got higher increases than others, each level of E/M got an RVU bump in the new fee schedule. Here is a list of the E/M codes and their new RVUs assignments:

• 99281 -- Emergency department visit for the evaluation and management of a patient, which requires these three key components: a problem focused history; a problem focused examination; and straightforward medical decision making
2006 RVUs: 0.33 2007 RVUs: 0.45

• 99282 -- ... an expanded problem focused history; an expanded problem focused examination; and medical decision making of low complexity
2006 RVUs: 0.55 2007 RVUs: 0.88

• 99283 -- ... an expanded problem focused history; an expanded problem focused examination; and medical decision making of moderate complexity
2006 RVUs: 1.24 2007 RVUs: 1.34

• 99284  -- ... a detailed history; a detailed examination; and medical decision making of moderate complexity
2006 RVUs: 1.95 2007 RVUs: 2.56

• 99285 -- ... a comprehensive history; a comprehensive examination; and medical decision making of high complexity
2006 RVUs: 3.06 2007 RVUs: 3.80

So why did CMS up all of these RVUs at once? According to Eli Berg MD, FACEP, chief operating officer of Medical Reimbursement Systems Inc., an ED billing company in Woburn, MA, and Chair of National ACEP's Reimbursement Committee, it is not unusual to see RVUs spike for all five E/Ms in the same year.

"CMS recognized the increased work associated with all the ED E/M services," which led to the RVU improvements, Berg explains.

Best bet: You need to be absolutely sure that your E/M claims are coded to the proper level. Remember, nearly all ED patients receive some type of E/M, explains McKenzie, who says between 80 and 85 percent of total revenue for most EDs comes from E/M services. If you're undercoding (or overcoding and receiving denials), your ED's bottom line will feel it.

"You need to be absolutely sure your documentation supports the E/M level assigned," McKenzie recommends.

For instance: A young man presents with finger laceration sustained while cutting a bagel. The ED physician performs an expanded problem focused history and notes that he is a smoker, but not diabetic -- both factors that could affect healing. Additionally, an expanded problem focused physical exam is performed looking at areas that go beyond just the finger to confirm proximal and distal neurovascular status and to check for other injuries.

By CPT rules, this visit would support a low-level E/M. You should not try to report a level 4 or 5 code for this encounter.

CMS Also Ups Critical Care Code RVUs

In addition to the standard ED codes for E/M services, CMS also upped RVUs for both critical care codes, says McKenzie. Here is a list of the new RVUs for both codes:

• 99291 -- Critical care, evaluation and management of the critically ill or critically injured patient; first 30-74 minutes
2006 RVUs: 3.99 2007 RVUs: 4.50

• 99292 -- ... each additional 30 minutes (List separately in addition to code for primary service)
2006 RVUs: 2.00 2007 RVUs: 2.25

New Conversion Factor Will Reduce RVU Gains

While it looks as if EDs will enjoy far greater returns on claims with the RVU adjustments, the increased E/M RVUs will be mitigated by the altered conversion factor, McKenzie says.

The basics: "The conversion factor is the dollar amount that Medicare pays for a single RVU, and is applied to all non anesthesia CPT codes and specialties equally," McKenzie explains. This year, CMS reduced the conversion factor by 5 percent because of the sustainable growth rate (SGR) methodology.

CMS has also applied an additional budget neutrality adjustment of -10 percent to the new work RVUs. Just like with the SGR, budget neutrality is a process imposed by Congress that was triggered by the increased spending generated by work value adjustments for all the codes considered in the RVU Update Committee (RUC) 5-year review, says McKenzie.

The overall impact these payment changes have on your 2007 bottom line will also depend on patient volume, payer mix, contractual agreements and code frequency distribution.

 Bottom line: On average, EDs should expect a 2 percent increase in their overall profitability in 2007, Medicare estimates. This may not seem like much, but it is better than most other specialties, which have projected significant reimbursement decreases due to the new fee schedule. In fact, only four of the 50 medical specialty societies represented are expecting increased revenue this year. By comparison with other hospital-based specialties, radiology practices can expect 14 percent less reimbursement next year, and anesthesia is slated for a 12 percent decline, Berg relays.

"If the ED E/M RVUs had not been increased, emergency medicine would have been faced with drastic cuts in 2007," Berg explains.