Site-of-service change drains surgeons’ wallets

7000 codes affected

HCFA’s revised Resource-based Relative Value Scale (RBRVS) practice expense proposal contains what some consider a radical set of first-ever dual site-of-service payment rates for almost 7000 procedure codes.

This two-tier payment system would replace HCFA’s current policy of automatically reducing posted practice expense fee schedules by 50% whenever physician services routinely performed in a doctor’s office are furnished in a setting such as a hospital or ambulatory care facility.

Proposal seeks to dodge double-paying

The goal of this site-of-service payment system is to avoid double-paying overhead costs for physician services and procedures routinely performed in a hospital setting, HCFA says.

Expect plenty of debate before this two-tier payment system takes effect, reimbursement analysts say. "Surgeons are not going to like this idea at all. It is going to have a major negative impact on their income," predicts Catherine Fischer, CPA, a reimbursement policy expert with Marshfield (WI) Clinic. Group practices, however, may be in the best position to weather any changeover to a dual payment system, says Fischer. The reason: A proper mix of different medical specialties and services typically offered in a group practice could serve as a buffer, minimizing any potential loss of income. She advises practices to go through the proposed list of some 7000 codes affected and compare these rates with historic HCFA payments the practice has received to get a picture of the cost changes.

Some services have escaped the site-of-service differential, however. If approved, only the following service categories would still have only one practice expense relative value unit (RVUs) per code:

—technical component only practice expense RVUs;

—professional component practice expense RVUs;

—evaluation and management services such as hospital or nursing facility visits, furnished exclusively in one setting;

—major surgical services (for example, coronary artery bypass surgery).

All other services would have two different levels of practice expense per code.

Here’s how the two-tiered system would work: HCFA will publish two sets of RVUs for the approximately 7000 codes affected by the ruling. The higher RVUs apply to services furnished in a physician’s office—or to services other than visits performed in a patient’s home and services furnished to patients in a nursing facility, skilled nursing facility or institution other than a hospital or ambulatory surgical center. The lower RVUs would apply to services performed in a hospital or ambulatory care setting.

There would also be two different practice expense RVUs per code for physician services routinely furnished in a doctor’s office that are provided in a facility setting. Specific codes subject to differing site-of-service practice expense RVUs are CPT codes 99201 through 99215 used to report office or other outpatient evaluation and management services furnished in the physician’s office or hospital outpatient department.

Also, HCFA says rather than being paid separately, the cost of medical supplies and services furnished in "incident to" physician services routinely performed in a provider setting should be included in the service-specific practice expense RVU. In turn, it proposes eliminating separate payments for supply codes A4263, A4300, and A4550.

While paid under the physician Medicare fee schedule, physician anesthesia services do not have their own separate practice expense RVU. HCFA would change this by moving these services under the RVU practice expense system.