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
