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 Physician Reimbursement in the United States

How Physician Reimbursement is Determined in the United States
Physicians in the United States who seek reimbursement for their services from the government (Medicare, Medicaid) and most insurers use CPT® codes to categorize and bill for their work.

Each code has a value assigned to it, which has been approved by the Centers for Medicare and Medicaid Services (CMS). The code value is determined by three factors: physician work, practice expense and the professional liability insurance. This value is then multiplied by a conversion factor (determined by CMS). The final payment will also include an adjustment for the practice location, as expenses are higher in some parts of the country than in others.

How Codes Are Created
The American Society for Surgery of the Hand takes an active role in the development and refinement of CPT codes related to hand surgery, and in the creation of their values. CPT codes are trademarked by the AMA. The AMA has established the CPT Editorial Panel to revise, modify and delete CPT codes. Approved changes are implemented once a year.

The CPT Advisory Committee was created to support the work of this panel. The 109 specialties represented in the AMA House of Delegates each nominate one individual to the Advisory Committee. (To retain its seat in the House of Delegates, and thus a seat on this panel, at least 51% of the entire ASSH membership must belong to the AMA.)

For detailed information on the process visit the AMA CPT Process - How a Code Becomes a Code page on the AMA website.

How Codes are Valued
The AMA RVS (Relative Value Scale) Updating Committee, also known as the RUC, makes recommendations to CMS regarding the values assigned to CPT codes. Final decisions are made by CMS, which generally accepts most but not all of the RUC recommendations.

The RUC Advisory Committee was created to support the work of this panel. The 109 specialties represented in the AMA House of Delegates each nominate one individual to the Advisory Committee. (To retain its seat in the House of Delegates, and thus a seat on this panel, at least 51% of the entire ASSH membership must belong to the AMA.)

For detailed information on the process visit the Resource-Based Relative Value Scale information page on the AMA website. You can also view a PowerPoint presentation on the process.

For hand surgery payment trends, click on the link to the PDF below:

 Reimbursement_Template.pdf

Updated 1/23/08