Pediatric Coding Alert

Question: How can I determine if a service's value has changed from last year?


Ohio Subscriber

Answer: To compare 2005 to 2006 payment rates, you should look at the code's payment units and the insurer's conversion rates. You can then use the National Physician Fee Schedule (NPFS) as a benchmark to judge any payment changes.

Many insurers adopt in some form Medicare's resource-based relative value scale, which assigns codes relative value units (RVUs) based on the service's work and required resources. Each code consists of RVUs that represent service work, practice expense, and professional liability. These values depend on the service's location--nonfacility or facility.

To calculate how much a particular code pays nationally based on the NPFS, multiply the total location-specific RVUs for the code by Medicare's conversion factor (2006 tentative CF = 36.1770*, 2005 CF = 37.8975). For instance, in 2005 and 2006, 99213 contains 1.39 total nonfacility RVUs. So the code pays $50.29 in 2006, compared to $52.68 in 2005. Tip: For insurers that use Medicare's RBRVS with a different CF, substitute the private payer's rate to determine a code's payment.

*Note: This CF may change in the next few weeks as Congress considers legislation that would alter the CMS current 4.4 percent decrease for 2006.

You also have to account for any geographic adjustments for your area. Payers may follow Medicare's lead and subject payment rates to geographic practice cost indices (GPCIs), which account for cost-of-living differences based on locality. To calculate how much Medicare pays for a code in your area:

1. Multiply a service's component RVUs by your corresponding GPCIs and add the figures to obtain the code's geographically adjusted total RVUs. For instance, if a pediatrician performs and documents a level-three non-facility office visit in Ohio, the values include: refer to the chart at the top of this article.

2. Multiply the total adjusted RVUs for the service by Medicare's CF. In 2006, Ohio Medicare pays 99213 at $48.59.