On June 29, 2006, the Centers for Medicare and Medicaid Services (CMS) proposed its 5 year update to the work relative value units (RVUs) used for the physician fee schedule, linked hereto at Physician Fee Schedule. Note, this is not the proposed 2007 physician fee schedule but, following completion of this work, will be used as the basis for the 2007 physician fee schedule.

The proposal (although including the entire physician fee schedule) deals specifically with procedure codes that were subject to review under this 5 year process and addresses them in the following categories:

1.         Dermatology and plastic surgery,

2.         Orthopedic surgery,

3.         Gynecology, urology, pain medicine and neurosurgery,

4.         Radiology, pathology, endoscopy, pulmonology, allergy and clinical immunology,

5.        Valuation and management codes,

6.         Cardio-thoracic surgery,

7.         General, colorectal, and vascular surgery, and

8.         Otolaryngology and ophthalmology.

The American College of Physicians has already trumped the fact that this proposal could increase the work RVUs for evaluation and management services (EMS) and, therefore, increase payments to internists and family practitioners by thousands of dollars per physicians, e.g.:

·        The work RVU for CPT 99213 would increase by 37% and payment would increase from $52.68 to $59.42 (12.8%);

·        The work RVU for CPT 99223 would increase by 26% and payment would increase from $157.29 to $173.27 (10.2%); and

·        The work RVU for CPT 99233 would increase by 31% and payment would increase from $79.21 to $90.95 (14.8%).

CMS estimates that the changes for the proposed work RVU changes would increase expenditures by approximately $4 billion. If implemented, those changes would go into effect for the 2007 physician fee schedule. There are also practice expense RVUs included in the proposed changes which would be implemented over a 4 year transition period.

The potential good news for the cognitive care specialties is potential bad news for remaining physicians, because Medicare rules require budget neutrality. Therefore, without an increase to the budget, the increases must be overset by decreases in other areas. CMS has proposed an across the board reduction of 10% for the professional component portion of the RVUs, as explained on page 37,241 of the CMS proposal. The proposal also includes a table listing the proposed percentage changes for the 5 year review as allocated among 54 specialties, indicating both the impact of the work RVU changes and the practice expense RVU changes. Some significant changes are a 6% decrease for anesthesiology for the work RVUs and a total 10% decrease when the full practice expense RVU changes are implemented by the year 2010. Infectious disease shows an 8% RVU increase and a 10% total increase by 2010. Interventional radiology discloses a 5% work RVU decrease and a total 8% decrease. Critical care shows a 4% increase that is more attributable to the practice expense change than the work RVU changes. Orthopedic surgery shows a 2% work RVU decrease and a total decrease of 4% by 2010. Each specialty should access the link included in this Blog to check their proposals with respect to their own specialties.