SVU Member Notice

Update on Medicare Provider Conversion Factor

(2/27/03) On February 19, Congress passed the Omnibus Appropriations Bill, House Joint Resolution 2, which included $54 billion to increase Medicare reimbursements for providers, and also provided legal protection to CMS to correct data errors that led to the 5.4% physician fee schedule cut last year. The legislation passed by Congress will eliminate the scheduled additional 4.4% reduction in the physician fee schedule conversion factor scheduled for 3/1/2003, and will instead result in a 1.6% increase in payments (a 6% swing). We understand this does include the technical component increase for vascular studies. President Bush signed the legislation into law on Feb. 20.

This bill, however, does not provide for a correction in the faulty Medicare formula. Congress and CMS must still work on correcting the faulty Medicare physician fee schedule formula. In addition, CMS Administrator Scully has said that this bill will not avoid a projected small Medicare provider decrease for 2004.

NOTE: According to Frank West, the exact value is $36.7856.

SVU members may want to submit as many of their pre-March 1 claims as soon as possible prior to 3/1. CMS has noted tht claims for procedures performed on dates of service prior to 3/1, but submitted after 3/1, will be processed at the almost uniformingly higher post-3/1 reimbursement rate. However, the catch is that the difference will be collected by the carriers later in the year, which mean that unsuspecting providers could find themselves in a cash flow bind later this year.

Steve Haracznak
SVU Executive Director