Physician Payment Systems By Steven Lash
Affordable Care Act (ACA) • • • • • •
Passed in 2010, effective January 1, 2014 ACA provides health coverage for more people, more benefits and protections (Guaranteed issue) and establishes marketplace exchanges Provides specific guidelines for incentives for wellness and prevention and that selected wellness and prevention services be at no cost to individual All plans must have additional “Essential Benefits” Mistakenly characterized as healthcare law that bends cost curve It is about Insurance reform than healthcare reform – Elimination of lifetime cap – No pre-existing conditions exclusions – Portability
2
•
Medicare & Medicaid
July 30, 1965, President Lyndon B. Johnson signed into law the bill that led to the Medicare and Medicaid
•
•
•
.
Medicare – Over 65 years of age – Part A Hospital coverage - automatic – Part B Physician Coverage – sign up and pay a premium Medicaid – Block funding grants for states to provide medical coverage for families meeting financial assistance thresholds Medicare Rx Drug Improvement & Modernization Act of 2003 (MMA) – Biggest change in 38 years – Created Medicare Advantage Plans – Part D Rx coverage implemented
What is a Medicare Advantage (MA) Plan • • • •
•
A type of Medicare health plan offered by a private company that contracts with Medicare to provide Part A and Part B benefits Characterized by a defined network of hospitals and doctors – Similar to a HMO on the commercial side Has a limit on out of pocket costs – maximum is $6,700 – Traditional Medicare has no maximum out of pocket Pays doctors on a capitated basis or Fee For Service basis – Capitation is a fixed amount usually a PMPM – If physician is capped CCM not paid Requires getting a referral from a PCP to see a specialist
What is the basis for physician payments •
Fee For Service (FFS) – Relative Value Unit (RVU) – measure of effort and cost • Physician payments under Part B have 3 components – PE (Physician Effort) – OE (Office Expense) – MP (Malpractice) – These units are then totaled and multiplied by a Conversion Factor ($35.8279) • The formula for 2016 is – .67 +.57+.04 = 1.28 X $35.8279 = $45.86 – This rate is then adjusted for Geography, professional shortage areas, and other modifiers including quality measures + a statutory reduction
Key Jargon for Payments ICD-9 Code: International Classification of Diseases
– Ensures description/diagnosis uniformity around symptoms, injuries, diseases, and conditions – Updated to provide for new medical discoveries – ICD -10 will be implemented October 1, 2015
CPT Code: Current Procedural Terminology
– Published by the AMA – Ensures description uniformity around all medical, surgical, and diagnostic procedures – 7800- 5 digit codes
There exists a critical relationship between an ICD-10 code and a CPT code which is to ensure that the diagnosis supports the medical necessity of the procedure performed. 6