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HHS/CMS | RIN: 0938-AI52 | Publication ID: Fall 1998 |
Title: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 1999 (HCFA-1006-FC) (HCFA-1006-P) | |
Abstract: This final rule will update physician payments by Medicare as required by section 1848 of the Social Security Act. It includes a provision to change the method of determining practice expense relative value units from the current charge-based system to a resource based system. In addition, new procedure codes for 1999 have been added. It also will include several policy changes involving medical direction of anesthesia services, and separate payment for abnormal papanicolaou smears. A provision to make some minor rebasing and revisions to the Medicare Economic Index is also included. Several changes are being made to clarify some provisions of the Balanced Budget Act of 1997 (BBA). | |
Agency: Department of Health and Human Services(HHS) | Priority: Other Significant |
RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Final Rule Stage |
Major: No | Unfunded Mandates: No |
CFR Citation: 42 CFR 410 42 CFR 414 | |
Legal Authority: 42 USC 1395w(4) PL 105-33, sec 4505 PL 105-33, sec 4507 PL 105-33, sec 4511 PL 105-33, sec 4512 PL 105-33, sec 4541 PL 105-33, sec 4556 |
Legal Deadline:
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Statement of Need: As pertinent to this regulation, the BBA requires implementation of resource-based practice expense relative value units on January 1, 1999. In addition, the BBA provided for the payment of drugs and biologicals on a new payment basis, implemented private contracting with Medicare beneficiaries, and provided for a new payment system for outpatient rehabilitation services. The BBA expanded the Medicare scope of practice for nurse practitioners and physician assistants. ^PFurthermore, since we established the physician fee schedule on January 1, 1992, our experience indicates that some of our part B payment policies need to be reconsidered. This final rule is intended to correct some of these payment policies. Also, we are rebasing and revising the Medicare Economic Index, which is used in formulas to update payments for physicians services and other part B services. In addition, we are finalizing the 1998 interim work RVUs and are issuing interim work RVUs for new and revised codes for 1999. |
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Summary of the Legal Basis: Since January 1, 1992, Medicare has paid for physician services under section 1848 of the Social Security Act (the Act), "Payment for Physician Services." This section contains three major elements: (1) A fee schedule for the payment of physician services; (2) a sustainable growth rate system for the rate of increase in Medicare expenditures for physician services; and (3) limits on the amounts that nonparticipating physicians can charge beneficiaries. The Act requires that payment under the fee schedule be based on national uniform RVUs based on the resources used in furnishing a service. Section 1848(c) of the Act requires that national RVUs be established for physician work, practice expense, and malpractice expense. Section 1848(c)(2)(ii)(II) of the Act provides that adjustments in RVUs because of charges resulting from a review of those RVUs may not cause total physician fee schedule payments to differ by more than $20 million from what they would have been had the adjustments not been made. If this tolerance is exceeded, we must make adjustments to the conversion factors (CFs) to preserve budget neutrality. |
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Alternatives: If this final rule is not published, we would not implement the BBA provisions related to physician services, physician assistants, nurse practitioners, payment for drugs and biologicals, and payment for outpatient rehabilitation services. In addition, known payment problems would not be resolved for the 1999 physician fee schedule and for other payment policies that need to be further clarified. |
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Anticipated Costs and Benefits: The practice expense provision is, by statute, budget neutral. The statute requires that revisions to payment policies not cause total annual physician fee schedule payments to differ by more than $20 million from what they would have been had the revisions not been made. If this threshold is exceeded, we would make adjustments to the conversion factor to preserve budget neutrality. |
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Risks: We expect a reaction to the practice expense proposal since there is a reallocation of relative value units for practice expenses between physician specialties and between codes. We expect that some physicians will argue that the relative value units are too low for them to provide the service. Also, we expect comments about the fundamental methodology used to calculate the practice expense relative values. |
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Timetable:
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Regulatory Flexibility Analysis Required: No | Government Levels Affected: None |
Small Entities Affected: Businesses | |
Included in the Regulatory Plan: Yes | |
Agency Contact: Stanley Weintraub Center for Health Plans and Providers Department of Health and Human Services Centers for Medicare & Medicaid Services 7500 Security Boulevard, Baltimore, MD 21244 Phone:410 786-4498 |