December 2000 Bulletin

HCFA publishes 2001 Medicare Fee Schedule

The Health Care Financing Administration (HCFA) has published its Final Rule on the 2001 Medicare Fee Schedule. The rule, which appeared in the November 1 Federal Register, contains refinements to work relative value units (RVUs) for several codes published in 2000, as well as HCFA’s interim decision on work RVUs for new and revised codes for 2001.

The rule makes further refinements to the practice expense RVUs, which will be in the third year of a four-year transition from a charge-based system to a resource-based system. Practice expense RVUs in 2001 will be 25 percent charge-based and 75 percent resource-based. The practice expense refinements produce a small negative impact on total payments for orthopaedic surgery. HCFA has also updated the premium data used to calculate the resource-based malpractice expense RVUs, which has resulted in small increases in those RVUs for many orthopaedic procedures.

The conversion factor for 2001 will be approximately $38.26, a 4.5 percent increase over 2000. The change to the conversion factor will offset the decreased payments due to practice expense refinements, resulting in small increases in total reimbursement for many orthopaedic procedures in 2001.

Other issues addressed by the final rule include the update of the geographic practice cost indices, critical care RVUs, care plan oversight, observation care codes, outpatient therapy supervision, outpatient therapy caps, and the second five-year refinement of physician work RVUs.

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