Primary Care Coding Alert

HCFA announced on Nov. 1, 2000, that new Medicare payment rates to physicians will increase an average of 4.5 percent overall in 2001. Family physicians will realize a slightly greater increase of 6 percent. Related specialties will also see an increase, with general practice physicians also earning 6 percent and internal medicine physicians earning 5 percent more, on average.

The increases are a result of a new payment system, called practice expense relative value units (RVUs), based on resources in providing care, as opposed to physicians historical charges. Year 2001 is the third year of a four-year phase-in of the new practice expense RVUs. Seventy-five percent of physician fees will be based on the new RVUs in 2001, while 25 percent will be based on the historical charge-based RVUs. Payments for 2002 will be based entirely on the new RVUs.

According to HCFA acting administrator Michael Hash, family physicians are seeing a greater-than-average increase because their historical charges for practice expenses were less than resource-based rates. These changes are intended to equalize that situation.

Some specialty areas will enjoy increases greater than the average 4.5 percent, including optometry (12 percent), rheumatology and dermatology (9 percent), otolaryngology and podiatry (7 percent), and ob/gyn, ophthalmology, plastic surgery and urology (6 percent). Those falling below the 4.5 percent average increase include cardiac surgery and thoracic surgery (-1 percent), gastroenterology (0 percent), cardiology, neurosurgery and vascular surgery (1 percent) and anesthesiology, emergency medicine, general surgery, pathology and radiology (2 percent).