Anyone who remembers the bruising political battle in 1997-1998over how Medicare would develop resource-based practice expenses can breathe a sign of relief over what is likely to be the painless shift to resource-based malpractice expenses. Medicare will work them into its payment formula starting January 1, 2000. That formula takes into account three relative value units (RVUs): for work (accounts for 54.5% of the total payment), practice expense (42.3%), and malpractice expense (3.2%). These three RVUs are added together and then multiplied by a conversion factor of $34.73. The fact that malpractice expenses are such a small part of the formula explains why payment for hematology/oncology codes will increase only 0.3 in 2000, which is fairly typical for most specialties. Medicare also wants to refine some of its practice expense RVUs. That would give hematology/oncology a 1% increase in 2002 over what payments would have been otherwise.