Medicare Fee Increase

Oncologists will get an average 6% increase from Medicare in calendar 2001. That puts them about midway amongst specialists, with optometrists getting a 12% hike and gastroenterologists coming out with a big goose egg. 

All specialties start out with a 5.1% increase, owing to an increase in the conversion factor to $38.2581 The conversion factor is the dollar figure against which the total relative value units (RVUs) for a particular CPT code is multiplied. However, in 2001 the 5.1% increase each specialty gets will be further modified—up or down—based on changes to the RVUs for the particular CPT codes they bill. The three key elements of those RVUs are physician work, practice expense, and malpractice expense. Practice expense is the key area of change. 

Under the direction of Congress, Medicare has been on a 4-year schedule to shift practice expenses from historical to resource-based, and 2001 is the third year of the transition period. Practice expenses will be 25% historical to 75% resource-based. The continuing shift in 2001 is scheduled to reduce oncologists’ share of the practice expense pie by 2% below what it might otherwise have been. Keep in mind, however, that reimbursement for oncology-heavy CPT codes is increasing just a little less than it would have without the 2001 practice expense changes. 

Medicare also made some changes to individual CPT codes that have nothing to do with the 4-year shift. Oncologists got a big victory when Medicare decided to reinstate the 10 minutes of clinical staff time to the practice expense RVUs for two chemotherapy administration CPT codes—96408 (intravenous, push technique) and 96410 (intravenous, infusion technique, up to 1 hour).