Ob-Gyn Coding Alert

CMS reduced the national Physician Fee Schedule conversion factor from $36.1992 in 2002 to $34.5920 for 2003, the agency announced Dec. 20, 2002.

To determine physician payments for Medicare patients, you should multiply the conversion factor by the geographically adjusted relative value units (RVUs) assigned to a procedure in the Physician Fee Schedule. CMS released the 2003 Physician Fee Schedule Dec. 31, 2002, but it will not become effective until March 1, 2003. CMS also will not process any of the new CPT 2003 codes until March 1. All services provided between Jan. 1 and Feb. 28 will be paid under the 2002 fee schedule. As part of the rule, CMS also released interim RVUs for new and revised codes that appeared in CPT 2003.

The 4.4 percent decrease in the conversion factor is the result of "a calculation methodology specified by law," according to CMS. "The law required the [U.S. Department of Health and Human Services] to set annual updates based in part on estimates of several factors. Although subsequent after-the-fact data indicate that actual increases were different to some degree from earlier estimates, the law does not permit those estimates to be revised."

In short, although the original formula for updating the Medicare conversion factor each year "is flawed and must be fixed," according to CMS administrator Tom Scully, it is a matter of law and cannot be changed without an explicit act of the U.S. Congress. Without such congressional action, Medicare payments will likely continue to fall each year. CMS has stated that it intends to work with Congress to develop legislation to reverse the trend toward lower physician payments "and hopes that such legislation can be passed before the negative update takes effect."

"Nothing would make us happier than to not be issuing this rule," Scully says. "But after months of extensive review of the law and the formula, it is clear that this is the appropriate update required by the existing statute. The administration has been, and continues to be, anxious to work with Congress to fix the flaws in the formula as soon as possible."

Although CMS reduced the overall conversion factor, it seemed to agree with the Health Care Professionals Advisory Committee (HCPAC) regarding the number of RVUs it should assign to new and revised codes for 2003.

For example, the agency accepted all of HCPAC's suggestions regarding the new and revised diagnostic ultrasound codes (76801-76817). On the other hand, the committee recommended lower work RVUs for several of these codes. For instance, +76810 (Ultrasound, pregnant uterus, real time with image documentation, fetal and maternal evaluation, after first trimester [> or = 14 weeks 0 days], transabdominal approach; each additional gestation [list separately in addition to code for primary procedure]) held 1.97 RVUs in 2002 but has only 0.98 for 2003 because this revised code now represents a lesser service than in 2002 that is, in 2002 you reported the code only once for a multiple-gestation pregnancy, whereas in 2003, 76810 has become an add-on code that you report for each additional fetus. This means that Medicare reimbursed the code at $71.31 in 2002 but will pay only $33.91 in 2003.

As with the ultrasound codes, CMS accepted HCPAC's recommendations concerning the new and revised colposcopy codes (56820-56821, 57420-57461). RVUs for these procedures range from 1.50 to 3.44.

CMS has requested physician comment regarding methods to recalculate fee schedule rates prospectively if Congress provides the department the right to do so. Physicians wishing to comment should contact CMS by mail:

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1204-FC
P.O. Box 8013
Baltimore, MD 21244-8013

Note that CMS will not accept facsimile transmissions. In your correspondence, be sure to refer to file code CMS-1204-FC and include one original and two copies of your comments.