Pediatric Coding Alert

Medicare not only cut relative value unit (RVU) reimbursement for 2003 by 4.4 percent in the Physician Fee Schedule but also reduced the number of RVUs granted to numerous codes. The double reduction will force pediatricians to economize and consider the value of remaining a Medicare provider or using a Medicare resource-based relative value scale (RBRVS) system. In December, CMS issued the 2003 National Physician Fee Schedule Relative Value File, which many payers base their Fee Schedule on. Many of the wins and losses discussed in the fee schedule's preamble will carry over to private insurance, including awarding work RVUs to critical care transport codes and accepting the AMA's RBRVS review update committee's (RUC) recommendations regarding work RVUs for the new critical care codes. Cuts Affect All Payers Some pediatricians think CPT coding exists in a bubble, but Medicare significantly influences carriers' policies. "Most non-Medicare payers use the Medicare Physician Fee Schedule as a benchmark at the very least," says Chip Hart, marketer for The Physician's Computer Company, which supports and develops pediatric-specific software to manage clinical and clerical duties for pediatric offices. Several carriers use the fee schedule directly, Hart says.

"Although the RVU system is designed for Medicare reimbursement, virtually every other payer system uses it in one way or another." In fact, the American Academy of Pediatrics (AAP) notes, "despite [the limitations of the system], private payers have moved rapidly to adopt this method of reimbursement." Awareness of Medicare's actions and directives, therefore, can help practices understand private payers' rules. CMS Reduces Conversion Factor Last year, the Medicare Physician Fee Schedule reimbursed about $36.20 ($36.1992) per RVU known as the conversion factor, which represented a 5.5 percent decrease from 2001. For 2003, Medicare will pay about $34.59 ($34.5920) per RVU, which represents a 4.4 percent cut from 2002. "That equates to an approximate 10 percent decrease in reimbursement for plans that are tied to Medicare," says Karen S. Walker, administrator of Pediatric Services of Florida Inc., a 250-physician pediatric independent practice association on the West Coast of Florida, with headquarters in St. Petersburg.

From 2001 to 2002, pediatricians averaged a 3.7 percent reduction in reimbursement on their most frequently used codes, Walker says. "With another reduction of up to 4.4 percent looming on the horizon, on top of malpractice insurance premium increases that averaged 300 percent, they'll be giving another pound of flesh."

Medicare published the final rule, effective March 1, in the Dec. 31, 2002, Federal Register. You may download the document from www.access.gpo.gov/ su_docs/fedreg/a021231c.html (scroll down to CMS and select text or pdf version) or visit the CMS Web site at cms.hhs.gov/physicians/pfs/. (For implementation information, see "Don't Let the Interim Fee [...]