A Preliminary Analysis of The 2009 RBRVS Data Set

November 29, 2008

Frank Cohen, a nationally recognized healthcare consultant and member of the National Society of Certified Healthcare Business Consultants (www.nschbc.org), has completed a preliminary analysis of the 2009 RBRVS data set, including the change in conversion factor and the removal of the BNA reduction factor on the work RVU.  All in all, the findings are quite interesting and indicate that, for the most part, physicians will realize an increase in the Medicare Fee Schedule allowable amount (and subsequent increase in Medicare revenue) for the upcoming year.  From Frank, here is a summary of how that works:

For 2008, the conversion factor is 38.0870.  When applied to the allowable calculation using RBRVS, you fist had to factor the work RVU by .8806 (reducing the value of the work RVU by 11.96%).  If you look at the ratio of work to total RVUs for all procedures that have a work RVU, the average of the CY 2008 and CY 2009 median value is 55.66%.  This means that, on average, the work RVU made up 55.66% of the total RVU value.  If you factor in the BNA reduction factor (reduce this by 11.96%), you see that the average reduction of the total RVU is around 6.65%.  Multiply this time the current conversion factor of 38.0870 and you get an average adjusted conversion factor for CY 2008 of 35.5557.  The conversion factor proposed for CY 2009 is 36.0666 and the BNA reduction factor has been removed (theoretically, it is already applied to the new CF).  This means that, on average, across all code categories, the result is an increase in the Medicare allowable for 1.44%.

If you look at this for the major coding categories, here are the results:

Surgical procedures – 1.27% increase (effective CF of 38.57)

Radiology procedures – 2.92% increase (effective CF of 39.20)

Pathology procedures – 3.11% increase (effective CF of 39.27)

Medicine procedures – 2.04% increase (effective CF of 38.86)

E/M procedures – 3.03% increase (effective CF of 39.24)

This is actually pretty good news for physicians.  If you want to calculate the impact this will have on a practice, you can conduct a proportion distribution calculation to get an overall impact on your Medicare revenue.  For example, if your distribution of procedures looks like this:

Surgical procedures – 19.4%

Radiology procedures – 3.6%

Pathology procedures – 2.9%

Medicine procedures – 15.6%

E/M procedures – 58.5%

multiply the percent utilization above times the percent change from the first table, as follows:

Surgical procedures – 19.4%  * 1.27% = 0.247%

Radiology procedures – 3.6% * 2.92% = 0.105%

Pathology procedures – 2.9% * 3.11% = 0.090%

Medicine procedures – 15.6% * 2.04% = 0.318%

E/M procedures – 58.5% * 3.03% = 1.774%

Total                                                         2.535%

The sum of the last column (2.535%) is the average weighted change in the allowable for your practice.

To get your estimated financial impact, multiply this number times your total Medicare revenue for this year.  The result will represent what your Medicare revenue would have been this year had these changes taken affect.  Assuming you some degree of stasis for next year, this can approximate the financial impact for the practice. 
Note that there has been an overall increase in the RVU values for next year, which will also positively affect Medicare revenue even more than given above.  The median increase for the total non-facility RVU value is projected at 0.30% and for the facility total, 0.22%. 
Frank has created a worksheet that shows the changes to RVU values for each procedure code in the physician fee schedule database (PFSDB) and has graciously agreed to allow the readers of this newsletter access to it. You can get the worksheet by going to www.cpahealth.com and clicking on the Download tab.  It is the first link on the page.  If you have questions regarding this article or RBRVS, please feel free to contact Frank: 
Frank Cohen, MPA
Senior Analyst 
CPA Health Partners 

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