decisionhealth Newsletters, Part B News - 2005 Issue 8 (August)
Proposal to update practice expense RVUs would create winners, losers among specialties
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Article Overview
This article covers a proposed CMS change to the physician fee schedule that would alter the method used to calculate practice expense relative value units and redistribute reimbursement impacts across specialties. It is relevant to physicians, specialty societies, practice managers, and coding/reimbursement professionals who track Medicare payment policy, CMS rulemaking, and the use of AMA-derived practice expense data. The article also discusses the proposed transition timeline, the role of survey data, and the policy context shaping the update.
Why This Topic Matters
Changes to practice expense RVUs can materially affect Medicare reimbursement by specialty, so understanding the proposal helps stakeholders evaluate financial impact, prepare for transitions, and respond to CMS during the comment process.
Article Sections
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CMS proposal and practice expense RVU methodology
Introduces the proposed update to practice expense relative value units and the new approach CMS says it would use to calculate them. It frames the policy change in the context of the 2006 physician fee schedule.
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Projected specialty impacts
Summarizes the specialties expected to see relative payment increases or decreases under the proposal. The section presents the broad distribution of expected financial effects without detailing coding changes.
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Data sources, transition timeline, and CMS concerns
Describes the practice expense data sources referenced in the proposal and the planned four-year transition to the new method. It also notes CMS concerns about practice stress and the agency’s interest in feedback.
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Indirect practice expense costs and policy background
Covers the types of indirect practice expense costs CMS says it is evaluating and the statutory background for accepting specialty survey data. It explains the broader rulemaking context without providing procedural guidance.
What You Will Learn
- How CMS proposed to change the method for calculating practice expense RVUs
- Which broad specialty groups were expected to experience larger payment changes
- What types of data sources and transition steps were described in the proposal
- Why CMS was seeking input on indirect practice expense cost calculations
- How the policy fits within the Medicare physician fee schedule framework
Who Should Read This
- Physicians
- Medical specialty societies
- Practice administrators
- Coding and reimbursement professionals
- Healthcare policy analysts
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