Hidden impact within 2008 Medicare rates

Frank Cohen (www.cpahealth.com) has again reminded us of a few very few important points:

Congress approved the stay of execution for the 10.1% reduction in the Medicare allowable and replaced it with a 0.5% increase through June of next year. The CF for the next six months is 38.0870. Not sure what will happen after that. In the mean time, they have continued with the BNA reduction factor on the Work RVU and increased it this year to 0.8806. This means that the work RVU is multiplied by 0.8806 before it is multiplied by the work GPCI. Overall, this will probably result in a decrease from the supposed-to-be Medicare allowable by anywhere from 3% to 9%. Make sure medical practices know that, if their contracts are based on RBRVS, this reduction factor should not be calculated as part of their payment amount. If they are tied to Medicare (look at the wording), they may have to eat the loss.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.