Derivation of relative values for practice expense using extant data

678 Pages·1996·42.1 MB·English

by  Pope, Gregory (Gregory C.)

ke = HEALTH ECONOMICS RESEARCH, INC.
Ee 300 Fifth Avenue, 6th Floor
Waltham, MA 02154
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DERIVATION OF RELATIVE VALUES FOR
PRACTICE EXPENSE USING EXTANT DATA
Final Report
Submitted By:
Gregory C. Pope, M.S.
Russel T. Burge, Ph.D.
with:
Health Economics Research, Inc.
300 Fifth Avenue, 6th Floor
Waltham, MA 02154
Prepared for:
Health Care Financing Administration
May 20, 1996
Final Revisions July 30, 1996
This report was prepared under Master Contract No. 500-92-0020 with the Health Care Financing Administration, Jesse Levy,
Project Officer. The views and opinions expressed in this report are those of the authors and no endorsement by HCFA should be
inferred or implied. The authors would like to thank Jesse Levy, Al Peden, and other HCFA staff for their helpful comments, but any
remaining errors are the responsibility of the authors. The total cost of this project was $82,796, which was 100% federal funds.

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TABLE OF CONTENTS
PAGE
EXECUTIVE SUMMARY
1.0 INTRODUCTION AND BACKGROUND
Pai The Medicare Fee Schedule Practice Expense Relative Value Units
1.1.1 Method of Calculation
1.1.2 Criticisms of the RVUs
2 Review of Methods to Develop Resource-Based Practice Expense RVUs
1.2.1 Long Term Methods Involving Primary Data
1.2.2 Short Term Methods Using Extant Data 1-12
2.0 SPECIALTY RESOURCE-BASED PRACTICE EXPENSE RVU METHOD
Dil Basic Method 2-1
De. Strengths and Limitations of the Specialty Resource-Based Method 2-3
28) Site of Service Differential 2-5
2.3.1 Direct and Indirect Practice Expense Relative Value Units 2-6
2.3.2 Site of Service Differential in Payment 2-7
3.0 SIMULATION METHODS 3-1
SAIL Data 3-1
Sy Service Level PEPs 3-2
3.2.1 Development of Specialty PEPs 3-2
3.2.1.1 Total PEPs 3-2
3.2.1.2 Direct and Indirect PEPs 3-2
3.2.2 Crosswalking Specialty and Procedure Codes 3-4
3.2.3 Calculation of Service Level PEPs 3-5
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TABLE OF CONTENTS
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PAGE
3.3 Calculation of Resource-Based Practice Expense RVUs 3-6
3.3.1 Basic Method 3-6
3.3.2 Radiology Codes 3-6
3.3.3. Non-Radiology Global, Professional, Technical Trios 3-7
3.3.4 Other “Test Trios” 3-8
3.3.5 Anesthesia Codes 3-9
3.3.6 Other Codes 3-10
3.4 Budget Neutrality Adjustment to Resource-Based Practice Expense RVUs _3-11
4.0 SIMULATION RESULTS 4-1
4.1 Procedure Code Level 4-2
4.2 Specialty Level 4-6
4.3 Locality Level 4-8
4.4 Site-Of-Service Differential Policy 4-9
4.4.1 Comparison of Current and Proposed Site of Service Adjustments to
Resource-Based RVUs 4-10
4.4.1.1 Service-Level Comparison 4-10
4.4.1.2 Specialty Income Redistributions 4-12
4.4.2 Comparison of 1996 Medicare Fee Schedule to Resource Based
RVUs With New Site-of-Service Policy 4-13
4.4.2.1 Service-Level Comparison 4-13
4.4.2.2 Specialty Income Redistributions 4-15
5.0 CONCLUSIONS 5-1
APPENDIX A ANOTHER INTERPRETATION OF THE SRB METHOD
APPENDIX B CPT CROSS-WALK TABLES: 1994 - 1996
APPENDIX C 1996 MFS AND SRB RVUs, BY CPT CODE
APPENDIX D ALLOCATING INDIRECT PRACTICE EXPENSES
APPENDIX E NON-PHYSICIAN OCCUPATIONAL WAGES AND INPUT
EXPENDITURE SHARES
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