Medicare Fee Increase

January 1, 2001

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.

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

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

Under the direction of Congress, Medicare hasbeen on a 4-year schedule to shift practice expenses from historical toresource-based, and 2001 is the third year of the transition period. Practiceexpenses will be 25% historical to 75% resource-based. The continuing shift in2001 is scheduled to reduce oncologists’ share of the practice expense pie by2% below what it might otherwise have been. Keep in mind, however, thatreimbursement for oncology-heavy CPT codes is increasing just a little less thanit would have without the 2001 practice expense changes. 

Medicare also made somechanges 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 minutesof clinical staff time to the practice expense RVUs for two chemotherapyadministration CPT codes—96408 (intravenous, push technique) and 96410(intravenous, infusion technique, up to 1 hour).