AASM Special Update: More Information on Physician Payments the Sleep Medicine RVUs

Earlier this week, Congress enacted legislation that postpones scheduled cuts to payments physicians receive for services provided to Medicare beneficiaries. The legislation addresses both the Sustainable Growth Rate (SGR) and the conversion factor.

What is the SGR? In 1997, Congress adopted the SGR, which is a component of the formula the Centers for Medicare & Medicaid Services (CMS) uses to calculate physician payments for providing services to Medicare patients. The SGR was designed to keep Medicare payments on track with growth in the economy. However, it is based on the gross domestic product (GDP) and not on actual health care practice costs. Escalating health care costs means that the cost for providing care to patients has grown faster than the economy as a whole. As a result, the SGR causes a reduction to physician payments many years. For sleep physicians, the reduction to payment would total approximately 30 percent this year.

Congress has passed a series of short-term fixes – the most recent earlier this week – but has yet to develop a long-term solution. It is expected that both the Senate and the House of Representatives will revisit this issue in December and introduce legislation that calls for a one-year postponement to cuts to payments for physician services provided to Medicare patients. However, this is not certain.    

The conversion factor is set by CMS. The conversion factor is a scaling factor that converts the geographically adjusted number of relative value units (RVUs) for each service in the Medicare physician payment schedule into a dollar payment amount. Updates to the conversion factor are predicated on three factors: The Medicare economic index, an expenditure target “performance adjustment”, and miscellaneous adjustments including those for “budget neutrality.” The current conversion factor is $36.87, and this value is effective through December 31, 2010. If Congress does not pass a second round of legislation to delay cuts, the conversion factor effective January 1, 2011, will be $25.52. Of additional note, while Congress may further delay the effects of the SGR on the conversion factor, CMS may still impose a decrease to the conversion factor unrelated to the SGR.       

The SGR and the conversion factor are not the only reductions to payment that were announced in the 2011 Physician Fee Schedule. The RVUs for sleep medicine codes are assigned new values in the Final Rule. The RVUs are not related to the SGR or the conversion factor. Further, these values cannot be changed by Congress; only CMS can adjust the RVUs for sleep medicine codes. The reduction to the RVUs for sleep medicine codes also has significant implications for our field.         

The following is a table of RVU and payment information for sleep codes 95803-95811. This table reflects RVUs applicable for 2010. The conversion factor used to calculate the payment information in this table is $36.87, which is the conversion factor that is effective through December 31, 2010. Please note that codes 95800 and 95801 are new codes in 2011 and are therefore not included in this table.

Code
Physician Work RVU
Physician Work Payment
Practice Expense RVU
Practice Expense Payment
PLI RVU
PLI Payment
Total RVU
Total National Payment = (work + PE + PLI) x Conversion Factor
95803
1.00
$36.87
2.37
$87.38
.04
$1.48
3.41
$125.73
95805
1.88
$69.32
8.74
$322.24
.08
$2.95
10.70
$394.51
95806
1.66
$61.20
3.79
$139.74
.07
$2.58
5.52
$203.52
95807
1.66
$61.20
11.18
$412.21
.12
$4.42
12.96
$477.83
95808
2.65
$97.70
15.28
$563.37
.15
$5.53
18.08
$666.60
95810
3.52
$129.78
17.08
$629.74
.18
$6.64
20.78
$766.16
95811
3.79
$139.74
18.94
$698.32
.21
$7.74
22.94
$845.80

What happens on January 1, 2011? Right now, it is uncertain if Congress – both the Senate and the House of Representatives – will act on additional legislation that will again delay a reduction to the SGR and the conversion factor. However, on January 1, 2011, the RVUs for the sleep medicine codes will change. Below are charts that outline two possible scenarios for payment.

January 1, 2011 National RVU and Payment Information with Conversion Factor Decrease

The following is a table of payment information for sleep codes 95800-95811. This table reflects RVUs applicable starting January 1, 2011. The conversion factor used to calculate the payment information in this table is $25.52, which is the conversion factor expected to take effect on January 1, 2011.

Code
Physician Work RVU
Physician Work Payment
Practice Expense RVU
Practice Expense Payment
PLI RVU
PLI Payment
Total RVU
Total National Payment = (work + PE + PLI) x Conversion Factor
95800
1.05
$26.80
37.51
$957.26
.05
$1.27
38.61
$985.33
95801
1.00
$25.52
64.32
$1641.45
.05
$1.27
65.37
$1668.24
95803
.90
$22.97
3.84
$98.00
.04
$1.02
4.78
$121.99
95805
1.20
$30.62
10.84
$276.64
.08
$2.04
12.12
$309.30
95806
1.25
$31.90
4.05
$103.36
.08
$2.04
5.38
$137.30
95807
1.28
$32.67
12.45
$317.72
.15
$3.83
13.88
$354.22
95808
1.74
$44.40
17.28
$440.99
.17
$4.34
19.19
$489.73
95810
2.50
$63.80
17.80
$454.26
.21
$5.36
20.51
$523.42
95811
2.60
$66.35
19.30
$492.54
.23
$5.87
22.13
$564.76
 
January 1, 2011 National RVU and Payment Information without Conversion Factor Decrease

The following is a table of payment information for sleep codes 95800-95811. This table reflects RVUs applicable starting January 1, 2011. The conversion factor used to calculate the payment information in this table is $36.87, which reflects the current conversion factor freeze. 

Code
Physician Work RVU
Physician Work Payment
Practice Expense RVU
Practice Expense Payment
PLI RVU
PLI Payment
Total RVU
Total National Payment = (work + PE + PLI) x Conversion Factor
95800
1.05
$38.71
37.51
$1382.99
.05
$1.85
38.61
$1423.55
95801
1.00
$36.87
64.32
$2371.47
.05
$1.85
65.37
$2410.19
95803
.90
$33.18
3.84
$141.58
.04
$1.48
4.78
$176.24
95805
1.20
$44.24
10.84
$399.67
.08
$2.95
12.12
$446.86
95806
1.25
$46.09
4.05
$149.32
.08
$2.95
5.38
$198.36
95807
1.28
$47.19
12.45
$459.03
.15
$5.53
13.88
$511.75
95808
1.74
$64.15
17.28
$637.11
.17
$6.27
19.19
$707.53
95810
2.50
$92.18
17.80
$656.28
.21
$7.74
20.51
$756.20
95811
2.60
$95.86
19.30
$711.59
.23
$8.48
22.13
$815.93

Local Payment Calculation

The RVUs and payment calculations in the Final Rule are based on national information. Payments for all services vary based on locality. In order to calculate the payment for your locality, you will need to find the Geographic Practice Cost Index (GPCI) RVUs for your locality. GPCI RVUs can be found in the Monday November 29, 2010, Federal Register on page 73817.  

Your Help is Still Needed

Until Congress announces a one-year delay to reductions for physician payments, I encourage all members to continue contacting your Senators and representatives in the House of Representatives. 

Steps Taken by the AASM

The AASM is currently drafting a formal response to the 2011 Physician Fee Schedule that will be sent to CMS. The comment will address the revaluation of the RVUs for sleep medicine codes and the methodology used to revalue these codes. 

2010-12-01T00:00:00+00:00 December 1st, 2010|Advocacy, Professional Development|