Otolaryngology Coding Alert

Medicare not only cut relative value unit (RVU) reimbursement for 2003 in the Physician See Schedule but also reduced the number of RVUs granted to many codes. The double reduction will force practices to economize and consider the value of remaining a Medicare provider.

(For information on procedures addressed in the fee schedule, see "CMS Packs Fee Schedule With Directives on Cerumen Removal, FEES/FEEST, Speech Codes" coming in the March 2003 Otolaryngology Coding Alert.)

Last year the Medicare Physician Fee Schedule reimbursed about $36.20 ($36.1992) per RVU, which represented a 5.5 percent decrease from 2001. For 2003, Medicare will pay about $34.59 ($34.5920) per RVU, which represents a 4.4 percentage cut from 2002.

Medicare published the final rule, effective March 1, in the Dec. 31, 2002, Federal Register. You may download the document from www.access.gpo.gov/ su_docs/fedreg/a021231c.html (scroll down to CMS and select text or pdf version) or visit the CMS Web site at cms.hhs.gov/physicians/pfs/. (For implementation information, see "Don't Let the Interim Fee Schedule Rules Drive You Crazy" in article 4.)

Along with the initial bad news of the reduction, otolaryngologists may face bigger reimbursement problems. The 4.4 fee schedule cut is not the complete story, particularly for ENTs and other surgeons, says Steven F. Isenberg, MD, FACS, an Indianapolis-based solo otorhinolaryngologist and director of physician services for Zotec Solutions Inc., which provides practice management and billing solutions for the healthcare industry."Medicare has also slashed the number of RVUs for procedures."

Many of the reductions occur in the expense portion of most procedural codes, Isenberg explains. For example, 42820 (Tonsillectomy and adenoidectomy; under age 12) reimburses a physician in Indianapolis, with the geographic practice cost index (GPCI) assigned, $244.51 in 2003, compared to $278.38 in 2002. The reduction reflects a combination of a reduced RVU reimbursement ($34.59 versus $36.20) and a reduction in the number of RVUs assigned for 42820 from an unadjusted allowable 8.21 RVUs in 2002 to 7.54 RVUs in 2003. (The 0.67-RVU difference was taken from the practice expense portion of the RVU calculation.)

"The net result is a 12.16 percent reduction in 2003 for 42820," Isenberg says. Other cuts include 31255 (Nasal/sinus endoscopy, surgical; with ethmoidectomy, total [anterior and posterior]) from 11.59 to 11.46, 31288 (Nasal/sinus endoscopy, surgical, with sphenoidotomy; with removal of tissue from the sphenoid sinus) from 7.65 to 7.57, and 31267 (Nasal/sinus endoscopy, surgical, with maxillary antrostomy; with removal of tissue from maxillary sinus) from 9.11 to 9.

The exact reduction percentage varies based on a practice's geography, CPT makeup and payer mix (although all carriers will likely look for guidance from Medicare), Isenberg notes. "Reimbursement, particularly for procedure physicians, will drop even more than 4.4 percent as a result of this double dose of bad news."

In fact, the fee schedule shows a 5 percent overall decrease for otolaryngology in Medicare-allowed charges. Medicare now allows $66 million in otolaryngology charges, which reflects a 1 percent decrease in RVUs and a 4.4 percent overall reduction.

Otolaryngologists will also have to contend with cuts in other areas. Plastic surgery has an overall 4 percent reduction resulting from the fee schedule adjustment alone. Allergy receives a 1 percent increase in RVUs to have an overall 3 percent decrease. The fee schedule grants a 2 percent increase in RVUs to audiology, which results in a 2 percent overall decrease.

In addition, all doctors will face reductions in office visits and consultations. CMS adjusted the RVUs in an attempt to equalize reimbursement for cognitive services, such as office visits, with procedures such as tonsillectomy and adenoidectomy, Isenberg says. CMS reduced every E/M RVU except 99201.

"The changes in the E/M codes are minimal, but there certainly was not an increase in the E/M RVUs to offset the variable, but often dramatic, reductions in procedural RVUs," he says. For Isenberg's comparison of the 2002 E/M rates to 2003's, see "The 2003 Fee Schedule's Bottom Line: CMS Cuts E/M Reimbursement Levels."

To see what your practice can expect from the 2003 reductions, compare 2002's figures to 2003's. "You should run your top 25 codes, figure what the reimbursement was supposed to have been in 2002, and compare it with the scheduled reimbursement for 2003," Isenberg recommends.

Practices will have to strive to operate as efficiently as possible in the wake of the declines. Work with the Academy of Otolaryngologists and your local, state and national societies, and focus on improving your systems to collect what you have legitimately earned, Isenberg says. Remember that you have until Feb. 28 to decide if you will be a participating physician in Medicare this year.