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1997 Medicare Physician Fee Schedule -- Information

*Last Updated January 1, 1993*

On Friday, November 22, HCFA published two key physician payment regulations: the final rule on 1997 payment policy changes to the Medicare physician fee schedule and the final update for 1997.

The net effect of the 1997 updates and the changes made as a result of the 5-year review are estimated to result in an average increase of 5 percent for primary care services fees. In comparison, HCFA estimates that the average fees for surgical services will decrease by 1.6 percent and the average fees for other services will decrease by 1.8 percent.

These updates are based on the "default formula" set in law, since Congress did not enact legislation specifying the 1997 updates.

This regulation also set the 1997 spending targets for physician services. These targets allow the following increases for 1997:

The key changes in physician payment policy for 1997 are:

The reg implements the results of the HCFA and RUC review of physician work values, which by law must be done at least every 5 years.

Because of the significant changes made to other services, HCFA had to make across-the-board reductions of 8.3% to all physician work values to maintain budget neutrality. HCFA decided to apply this reduction only to the work RVUs for one year only. HCFA states that next year when they implement the resource-based practice expense payments, the adjustment will be made to all conversion factors.

HCFA estimates that this will have an impact of increasing fees, on average, for family practice by 2.5 percent and for internal medicine by 2.1 percent.

For a copy of the HCFA table displaying the impacts by specialty, please email HealthAdvo@aol.com. The range is from an increase of 15% for chiropractors and 5% for anesthesiology to an almost 6% cut in fees to pathologists and ophthalmologists.

HCFA has increased the percentage of intraservice work slightly more than earlier proposed. The final work RVUs for these codes include a 12.5 percent increase in the percentage of intraservice work to reflect the added preservice and postservice work, rather than the 10 percent increase proposed in May. This change reflects the increase in pre and post service work over the past 5 years for outpatient consultations is half of that for office visits.

HCFA has maintained the 1996 work values for these codes until after the CPT Editorial Panel reviews these and the home visit codes.

HCFA has not changed the 1996 work values, including those earlier proposed to be decreased. HCFA says that the CPT descriptors do "not accurately describe the nature of the services furnished in the typical case." HCFA further states that the CPT Editorial Panel is going to reexamine these codes and it is anticipated that the new descriptors and new work RVUs will become effective in 1998. HCFA also says that "Simultaneously, the adoption of a practice expense RVU schedule in 1998 will allow us to address the increased physician work and decreased use of clinical staff for these codes in a uniform manner."

HCFA is replacing the Care Plan Oversight Code (CPT code 99375) with 3 HCPCS codes in an effort to eliminate confusion about proper reporting of this service. HCFA's data from 1995 and 1996 show inappropriate use, including physicians who billed it for services provided to people who were not receiving hospice or Medicare covered home health services. The new codes have the same final work RVUs assigned to CPT code 99375.

AGS members should not use CPT code 99375, as it will no longer be recognized for payment.

HCFA indicates that they will forward the temporary codes to the CPT Editorial Panel for consideration.

G0064: Physician supervision of a patient under care of home health agency (patient not present) requiring complex and multidisciplinary care modalities involving regular physician development and/or revision of care plans, review of subsequent reports of patient status, review of related laboratory and other studies, communication (including telephone calls) with other health care professionals involved in patient's care, integration of new information into the medical treatment plan and/or adjustment of medical therapy, within a calendar month; 30 minutes or more.

G0065: Same description, except for hospice patient.

G0066: Same description, except for nursing home patient.

The value for the first two codes is 1.73 work RVUs. The code for a nursing home patient will not be paid separately since HCFA considers this service to be bundled in the nursing home fees.

Only one of these codes can be billed per month per Medicare beneficiary. All other policies that previously applied to CPT code 99375 will continue to apply to these new codes.

The final rule also reduces the numbers of physician fee schedule payment localities from 210 to 89. These geographic adjustments will be fully effective in all States in 1997, except in Missouri and Pennsylvania which will be phased in over 2 years because the losses in those states decreased by more than 4 percent.

For a copy of the 1997 RVUs for E and M services and/or a copy of the entire rule, please email HealthAdvo@aol.com