Medicare Fee Schedule, Payment and Reimbursement Benefit Guideline,

Medicare payment fee schedule  is changing from state to state and county to county. Hence before download any fee schedule implementation, please make sure that you are choosing the correct county and state.

MEDICARE PHYSICIAN FEE SCHEDULE


ICN 006814 February 2017


PHYSICIAN SERVICES


Medicare Part B pays for physician services based on the Medicare PFS, which lists the more than 7,000 unique codes and their payment rates. Physicians’ services include: 


● Office visits
● Surgical procedures
● Anesthesia services
● A range of other diagnostic and therapeutic services Physicians’ services are furnished in all settings, including:
● Physicians’ offices
● Hospitals
● Ambulatory Surgical Centers
● Skilled Nursing Facilities and other post-acute care settings
● Hospices
● Outpatient dialysis facilities
● Clinical laboratories
● Beneficiaries’ homes


MEDICARE PFS PAYMENT RATES


The Medicare PFS payment rates formula shows how a payment rate for an individual service is determined, and we provide a description for each component below the formula.

1) Relative Value Units (RVUs)


Three separate RVUs are associated with calculating a payment under the Medicare PFS:


● The Work RVU reflects the relative time and intensity associated with furnishing a Medicare PFS service


● The Practice Expense (PE) RVU reflects the costs of maintaining a practice (such as renting office space, buying supplies and equipment, and staff costs)


● The Malpractice (MP) RVU reflects the costs of malpractice insurance






2) Geographic Practice Cost Indices (GPCIs)


Each of the three RVUs are adjusted to account for geographic variations in the costs of practicing medicine in different areas within the country. These adjustments are called GPCIs, and each kind of RVU component has a corresponding GPCI adjustment.




3) Conversion Factor (CF)


To determine the payment rate for a particular service, the sum of the geographically adjusted RVUs is multiplied by a CF in dollars. The statute specifies the formula by which the CF is updated on an annual basis.


You can use the Physician Fee Schedule Search Tool to obtain national and local payment rates. 
For information on how to use the Physician Fee Schedule Search Tool, refer to How to Use the Searchable Medicare Physician Fee Schedule


https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/How_to_MPFS_Booklet_ICN901344.pdf

Method for Computing Fee Schedule Amount

The CMS continually updates, refines, and alters the methods used in computing the fee schedule amount. For example, input from the American Academy of Ophthalmology has led to alterations in the supplies and equipment used in the computation of the fee schedule for selected procedures. Likewise, new research has changed the payments made for physical and occupational therapy. The CMS provides the updated fee schedules to carriers on an annual basis. The sections below introduce the formulas used for fee schedule computations.

A. Formula

The fully implemented resource-based MPFS amount for a given service can be computed by using the formula below:

MPFS Amount = [(RVUw x GPCIw) + (RVUpe x GPCIpe) + (RVUm x GPCIm)] x CF

Where:

RVUw equals a relative value for physician work,

RVUpe equals a relative value for practice expense, and

RVUm refers to a relative value for malpractice.

In order to consider geographic differences in each payment locality, three geographic

practice cost indices (GPCIs) are included in the core formula:

A GPCI for physician work (GPCIw),

A GPCI for practice expense (GPCIpe), and

A GPCI for malpractice (GPCIm).

The above variables capture the efforts and productivity of the physician, his/her individualized costs for staff and for productivity-enhancing technology and materials.

The applicable national conversion factor (CF) is then used in the computation of every MPFS amount.

The national conversion factors are:

2002 – $36.1992

2001 – $38.2581

2000 – $36.6137

1999 – $34.7315

1998 – $36.6873

1997 – $40.9603 (Surgical); $33.8454 (Nonsurgical); $35.7671 (Primary Care)

1996 – $40.7986 (Surgical); $34.6296 (Nonsurgical); $35.4173 (Primary Care)

1995 – $39.447 (Surgical); $34.616 (Nonsurgical); $36.382 (Primary Care)

1994 – $35.158 (Surgical); $32.905 (Nonsurgical); $33.718 (Primary Care)

1993 – $31.926 (Surgical); $31,249 (Nonsurgical);

1992 – $31.001

For the years 1999 through 2002, payments attributable to practice expenses transitioned from charge-based amounts to resource-based practice expense RVUs. The CMS used the following transition formula to calculate the practice expense RVUs.

1999 – 75 percent of charged-based RVUs and 25 percent of the resource-based RVUs.

2000 – 50 percent of the charge-based RVUs and 50 percent of the resource-based RVUs.

2001 – 25 percent of the charge-based RVUs and 75 percent of the resource-based RVUs.

2002 – 100 percent of the resource-based RVUs.

As the tabular display introduced earlier indicates, CMS has calculated separate facility and nonfacility resource-based practice expense RVUs.