A Quick Intro
By: Connie Sakellaropoulos, MOTR/L
I just read a quote about math that said, “If it seems easy, then you must be doing it wrong”. That’s how I feel about math and the same applies (for me anyway) in calculating the Medicare Fee Schedule.
Your reimbursement is determined by several things that include not only the conversion factor but also something known as the GPCI which officially (thanks for asking!) is the Geographic Practice Cost Index but which I privately refer to as the “Getting Perplexed & Complicated Index”.
Lucky for us, we have Lexi on our side who understands everything Medicare reimbursement and knows how to make sense of it for the rest of us. She has the scoop on next year’s numbers…
So... is there an increase?
The Answer (from Lexi):
Well, the conversion factor~ which is the base rate for calculating the Medicare fee schedule was increased from 36.0391 to 36.0896 for 2020. But, before you celebrate, know that as a provider you may still be facing a decrease in reimbursement. This is because of how the Medicare fee schedule is calculated and changes that can affect your reimbursement. There are three variables, known as the geographical practice cost index (GPCI) which are multiplied by the conversion factor and added together to determine the Medicare allowable amount. The GPCI includes the established relative value rates for work, practice expense and malpractice expense. The practice expenses are the non-labor costs of maintaining a practice, and CMS has determined that these costs “decrease” after the first 15 minutes of service, which is why we have the MPPRS. In calculating the fee schedule, the three variables of the GPCI are multiplied by the conversion factor and the sum equals the allowable amount. For the second and subsequent units, the practice expense is reduced by 50 percent in that sum, and all units after the first are paid at the lower rate. While the Medicare allowable amount is important, only a small fraction of your billing will be paid at that rate. Since the MPPRS rate is applied for all units after the first, that is the more important of the two rates.
If either of the three variables in the GPCI that make up the fee schedule calculations are reduced, then potentially, so is your reimbursement. Since the change to the conversion factor for 2020 is minimal, any increase can be negated if the GPCI variables are reduced. Finally, if the Practice Expense component of the GPCI is reduced, then your initial fee schedule rate is reduced and the MPPRS allowable amount is further reduced.
Helping your business is our business at ITA.
Let us know if you need help crunching the numbers
(oh... and don't worry. We'll send Lexi, not Connie)