The complete story about Medicare 'private contracts'.
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Relative value units (RVUs), originally developed as a physician payment mechanism, have expanded into a valuable practice management tool that allows common denominator analyses and per-unit comparisons for both clinical productivity and expense data. Use of RVUs in practice management falls into three broad categories: productivity, cost, and benchmarking. These will be covered in a series of four articles. RVU analysis can be readily applied to strategic planning, resource allocation, budgeting, provider compensation, cost-based fee schedules, payer analysis, contract review and maintenance, per-procedure profitability analysis, etc. Exactly what are RVUs? Where did they come from? How do they differ from encounters and fees in terms of measuring provider productivity? How can they be used to increase cost-effectiveness and maximize productivity within medical practices? This initial article discusses RVU basics and sets the groundwork for the series.
Beginning January 1, 1992, Medicare has relied on a resource-based relative value scale (RBRVS) to establish physician fees. Medicare pays 80 percent of the lower of the amount a physician bills for the service or the fee schedule amount. The patient is responsible for the remaining 20 percent, as well as the annual Part B deductible of $100, plus any additional amount the physician may be allowed to bill. Rarely is the billed amount below Medicare's fee schedule amount. Adoption of the RBRVS fee schedule severed the link between the amount a physician charged for a service and the amount Medicare paid for it. RBRVS implementation required significant changes in the coding system used to document and bill physician services, particularly medical visits and consultations.
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This paper examines the changes in the billing for office visits, hospital visits, and consultations in the Medicare program for the period of 1986 through 1988. The analysis does not correct for changes in beneficiary or provider characteristics over the three-year period. Findings indicate $75 million in additional Medicare expenditures due to change in pattern of physician charges for these three commonly performed groups of procedures.
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Physician payment reforms implemented in January 1992 have dramatically changed the way payments for services are determined under the Medicare Part B program. This paper presents new measures of access using physician-level data that provide a baseline for monitoring changes in access that might occur as these payment reforms unfold and that allow us to examine recent access trends. Our results suggest that Medicare beneficiaries as a group currently have a high degree of access to care, and that access generally improved between 1986 and 1990.
A CMS project will let doctors earn bonuses for helping hospitals cut inpatient costs, using software designed by Michael Kalison, left. But not everyone is excited about the plan, including U.S. Rep. Pete Stark, the California Democrat who championed the physician self-referral legislation the CMS is waiving for the program.
There are many other provisions to the MMA. It is important to remind our patients that these changes are voluntary. If patients are satisfied with their current Medicare benefits and plan, they need not change to these new plans. However, as physicians we should familiarize ourselves with these new Medicare options so as to better advise our patients. For more information, visit www.ama-assn.org. The Medical Society of Delaware will strive to keep you informed as these new changes are implemented.
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