March 25th, 2012
The Pie-ing Game: How Do We Carve up Shrinking Reimbursements?
Several Cardiology Fellows who are attending ACC.12 this week are blogging together on CardioExchange. The Fellows include Tariq Ahmad, Bill Cornwell, Megan Coylewright, Jeremiah Depta, and John Ryan (moderator). Read the previous post here. Read the next post here.
Everyone knows the reimbursement pie is shrinking, both in terms of the size of the pie, and the piece designated for cardiology. This morning’s session—How to Code and Get Reimbursed—used this metaphor to full effect, and also gave a much needed explanation of how this is happening. Coding and reimbursement is a topic from which many cardiologists remain detached, but all are affected, and should at least know the basics. More importantly, we should all be prepared for what it to come….
The basis of reimbursement, as most know, is an RVU (Relative Value Unit) which is assigned to various procedures and clinical interactions. More complicated interactions and procedures obviously receive higher RVUs. However, assigning the numbers of RVUs is only one part of the process of reimbursement, as I learned today. The Centers for Medicare and Medicaid Services (CMS) reimburse for a clinical interaction based on a sum of three elements:
- RVU’s assigned to the procedure itself,
- Expense (either direct or indirect) the doctor incurs to perform the procedure and
- Cost of the liability coverage associated with the procedure.
Obviously they have complicated formulas to decide the final two elements; providers don’t get to just send the government a bill! Once they have added these three elements, they get a total RVU value which is then multiplied by a conversion factor (determined by law). This final number represents the dollar amount sent back to the provider as reimbursement. In 2000, the conversion factor was 36.62. This year, it was scheduled to drop to 24.67 , but Congress intervened to pass “Doc Fix”, bringing the number back up to 34.04.
So why are reimbursements down? First, the number of RVUs assigned to a particular procedure have decreased because of mandatory bundling of procedures. For example, a nuclear scan that could previously be coded into multiple sections (EF, wall motion, etc) is now coded as a single procedure. Second, the compensation for expenses (cost to maintain echo equipment, nuclear camera, etc) has dropped drastically. Cardiologists used to receive very high compensation for indirect expenses, but not anymore. Finally, the RVU conversion factor has stayed flat or even dropped.
So what is on the horizon? According to the ACC Coding and Reimbursement Working Group, much of the worst is over. With the exception of PCI and procedures like EKGs and CXR, much of the mandatory bundling of cardiovascular procedures has already taken its course. However, there is a nationwide push to increase reimbursement for primary care providers, which will likely come at the expense of specialists. The pie will not be increasing anytime soon.