Mod 6 Chapter 4

OBRA 90-Public Law 1992

Every year after 1992, a fee schedule must be established for all physician services in all geographic area

allowed amount

UCR - Usual, Customary and reasonable

Fees are assigned

according to the particular CPT code, and this is considered the allowable amt for that particular procedure.

Relative Value Units (RVUs)

studied that assigns unit value to a particular procedure

The appropriate conversion factor is determined by

the CPT code for the procedure, not the description of the service

Reasons a UCR amount will not be available

the CPT code is a BR (by report) procedure The code entered is an RNE (Relatively Not Established) procedure The code entered is not listed in the most recent current Procedural Terminology (CPT) book because it is a new procedure

If a fee schedule is used

the clams examiner looks up the appropriate code to obtain the allowed amt, however, the compensation with the schedules is the same in a large city as it is in outlaying areas

OBRA 90-Public Law

Major changes for physician payment reform took place. Once change was the implementation of a fee schedule for physician payment

Not all procedures have a UCR fee

New procedure, experimental procedures, very unususally and complex procedures may not have an established UCR amount

UCR - Usual, Customary and reasonable

Insurance carriers limit payment to a specified amount based on the UCR system

Fee Schedule

List of charges for service performed

Components for resource-based RVS

Physician's Work Component Overhead or Practice Expense component Malpractice or professional liability component

Special Services

Regardless of the type of service proformed, the UCR calculation is based on the medicine conversion factor category

RVS/Conversion factor method

This system bases amounts on the procedure performed, the geographic location (zip code area) of the provider of service's office, and the date of the service was performed

UCR - Usual, Customary and reasonable define covered expenses as charges for the services and supplies

Those that are medically necessary for the treatment or diagnosis of an injury or illness Those that are ordered or prescribed by a licensed provider Those that do not exceed the UCR fee generally charged by like providers in the same geographic area for the same procedure

The conversion factors

a dollar amount determined for a specific service type or a particular geographic area (referred to as a region) in which the provider practices

Unit Value

a numerical value assigned by a relative value study to a procedure code. The unit value is multiplied by the conversion factor to determine the UCR allowance or a basic allowance

Concept of usual, customary and reasonable charges

allows a payer to determine allowable charges based on what is considered to be a usual and reasonable charge for a given service performed in a given area

Procedure code

codes that identify medical treatment or diagnostic services

For standard adjustments on the modifiers

consult the CPT book. For those modifications not listed, the adjustment will vary according to the insurance carrier's policy and the contract provision

UCR allows

for the payment of higher rates in areas in which there is a higher cost of doing business and lower rates in areas in which there is a lower cost of doing business

RVS are to be adjusted

for various locales by a geographic adjustment factor. These factors are often referred to as conversion factor

Basic Allowance

is usually paid at 100%

UCR under major medical

not normally specified in the plan document because it is usually upgraded periodically due to inflation

Modifier code

numbers that are added on to a code to report particular fact

determining UCR

the listed procedure unit value is multiplied by the plan's appropriate conversion factor or factors

UCR prevents

the paying of excessive benefits to doctors who may charge high fees on their bills

UCR Calculation

the process of determining the fee usually charged by similar providers for the same procedure in the same geographic area during a specified period of time

Relative Value Units (RVUs) represent

the total RVS for components of the schedule

Using Modifiers

unit value or UCR amt should be increased or decreased based on the special circumstances which the modifier represents

The basic benefit

usually has a dollar conversion factor specified in the plan document, all providers, regardless of their geographic location or when the service is performed, receive the same basic allowance for a specific procedure.

Allowed Amount

what the insurance company considers to be a reasonable charge for the procedure performed

UCR can only be established

when enough procedures of a particular type have been performed in a geographic area, usually a minimum of 50 operations is required to provide even a rough estimate of the amount that should be considered as usual