January 2012 Issue

 

 

The payroll tax extension legislation that was passed by Congress and signed by the President on December 23, 2011 (Public Law 112-078) delayed the 27.4% Medicare pay cut due to the Sustainable Growth Rate (SGR) formula until February 29, 2012. Although P.L. 112-078 provided for a zero percent update to the Medicare conversion factor, the final rule indicated that there would be a 0.18 percent increase in the conversion factor for budget neutrality. This change was implemented January 1, 2012. The 2012 conversion factor (at least through Feb 29) is $34.0376.

 

The Centers for Medicare and Medicaid Services (CMS) has indicated that because Congress acted so late in 2011 to prevent the SGR cut, claims must be held for a period of time to allow CMS time to develop the new payment rate files and the Medicare claims administration contractors time to install and test the files. CMS expects that most if not all contractors will be ready to process claims under the revised rates on or before Jan 18, 2012, which is the end of the 10-business-day claims hold period previously announced, but contractors’ time frames may differ. Watch your Medicare claims payment closely!

 

 

The table below lists the top 20 Medicare hand surgery procedures (by allowed charges) and four office visit codes commonly performed by hand surgeons. These data indicate that important hand surgery codes are either flat or have seen a slight increase in Relative Value Units (RVUs) for 2012. This is primarily the result of two factors: 1) CMS is still phasing in changes to practice expense details based on review by the AMA Relative Value Update Committee (RUC) several years ago; and 2) there is variation in the specialties submitting claims for any given procedure. This second factor is important because the practice expense per hour (PE/hr) is different between specialties. Hand surgery PE/hr is $193.08; orthopaedic surgery PE/hr is $162.94; and plastic surgery PE/hr is $182.50. Every physician self designates his/her specialty to Medicare. Interestingly, hand surgeons often designate themselves as being orthopaedic or plastic surgeons rather than being hand surgeons. If a physician practice is primarily hand/upper extremity, but the physician's Medicare designation is orthopaedic surgery, the result is a decrease in practice expense reimbursement for hand surgery procedures because of the lower PE/hr data. Please check your Medicare designation and designate yourself as a Hand Surgeon!