Urology Coding Alert

Reimbursement can differ from state to state, so to avoid a letdown from calculating your fees on a national basis, follow these guidelines to pinpoint your deserved reimbursements.

The Physician Fee Schedule determines reimbursements based on the following elements: a resource-based relative value system using relative value units (RVUs), a nationally uniform conversion factor used to convert relative values into payment amounts, and a geographic adjustment factor called the geographical practice cost index (GPCI) for each Physician Fee Schedule area. To calculate the Medicare payment for a given service, you start by finding the geographic indexes for your area. For 2003, these indexes can be found codified in the Federal Register for Dec. 31, 2002.

To calculate a fee, find the RVUs indicated for the code. Each RVU has three elements work RVU, practice expense RVU, and malpractice RVU which added together result in the total RVU for a given service. Select either the total facility or total nonfacility RVU for the CPT Codes, and multiply it by the conversion factor.

However, to calculate the payment for a service when it is provided in a specific area, you need to use the appropriate geographic index. Don't just look up your state on the GPCI, because these regional indexes may be broken down by carrier, state, city or other region.

Multiply the work RVU by the geographic factor for work for your area; multiply the practice expense RVU by the geographic factor for practice expense; then multiple the malpractice RVU by the geographic factor for malpractice. Add these three components together to get a total RVU. Multiply the total RVU by the national conversion factor to get the fee schedule amount for the service in your area.

Don't be confused by the terminology "facility" and "nonfacility" RVU. Use the facility RVU if a service is provided in an inpatient or outpatient hospital setting, including a hospital, emergency room, skilled nursing facility and ambulatory surgical center. Use the non-facility RVU if a service is provided in the physician's office, or patient's home or rest home.