Orthopedic Coding Alert

 Medicare legislation raises conversion factor by 1.5 percent

CMS offered orthopedists an early holiday gift this year: Despite earlier reports of a 4.5 percent conversion factor decrease, CMS announced a last-minute increase, raising the conversion factor by 1.5 percent for both 2004 and 2005.
 
Thanks to the Medicare Prescription Drug and Improvement Act, approved by Congress on Nov. 25, the conversion factor, which was $36.7856 in 2003, will rise 1.5 percent to approximately $37.3373 (CMS has not released the new rate's exact amount).
 
This congressional move allowed orthopedists to avoid the potential bad news that most coders dreaded: In September 2003, CMS released its original Physician Fee Schedule, which included a conversion factor of $35.1339, effective Jan. 1, 2004. This conversion factor represented a drop of 4.5 percent from the 2003 rate of $36.7856.
 
At that time, CMS Administrator Tom Scully said, "CMS has no option other than to base this final rule on the current law. If Congress does pass legislation improving payments to physicians, CMS will implement the new payment rates as quickly as possible."
 
The last-minute increase is particularly good news for orthopedists, because CMS did not increase relative value units (RVUs) for most orthopedic surgery procedures. In fact, Medicare decreased the RVUs for many services, and did not change the RVUs for most others.
 
"Some of the RVU cuts, such as those for total hip replacements (27130), are very surprising," says Danielle Waters, coder at the Bone and Joint Center in Philadelphia. "Complex surgeries should get RVU increases, not decreases." The chart below lists some sample RVU cuts that will affect orthopedic practices.