Some readers have (in my opinion) misinterpreted the CMS adjustment to overhead calculations. This really is what happened:
- The RVU calculations include a overhead cost
- Overhead costs had not changed in many years
- The AMA commissioned an independent study to provide more accurate overhead costs for the formula
- Imaging studies (having a major impact on cardiology and radiology) had overhead overestimated. As I understand the problem, CMS had originally estimated that an imaging machine would be used 50% of the time. When measured the machines actually had over 90% usage. Since depreciation of the machines is part of the overhead calculation, in fact the overhead was markedly overestimated for many years.
- Therefore the decrease in cardiology and radiology payments is an adjustment.
- The total amount that CMS pays our has not changed.
- Because of that adjustment, and a recalculation of primary care office costs (they were markedly underestimated), primary care is getting a bit more (as one commenter points out with dollars)
This is not a conspiracy to decrease physician payments. This is a cold calculation. The commissioned study led to winners and losers.
Primary care has been unfairly penalized for many years. The increasing overhead in primary care had no adjustment for many years. Now we do have an adjustment that helps primary care a bit.
If you graph the primary care/specialty income gap since RBRVS started, the gap has grown every year. The gap makes clear one of the reasons that few students and residents choose primary care.
As I say often, our payment system has major problems. Cardiology and radiology still will more than double primary care in income. CMS has used AMA data to make an adjustment. There is no conspiracy here. The adjustment has actuarial soundness.
{ 7 comments… read them below or add one }
the commissioned study had 55 replies from the cardiology side, rather than their goal of at least 100, for statistical significance. the collected data suggested cardiology costs dropped 40% between 02 and 06. is that plausible to you? the data was not available for review until after the cuts were announced.
i guess any data is data. commissioned studies should not be evaluated for possible flaws if they would be inconvenient to the government.
my question to you is simply-when you say there is a commissioned study with winners and losers and cold calculations and actuarial soundness, do you feel you can say you have honestly evaluated enough of the data and methodology to say that it is good data on which to base such decisions? or if it were evident that the data was inconclusive, it is good enough since in your opinion cardiologists make too much money compared to primary care colleagues?
One of the problems with Medicare is that Part A (hospital costs) and Part B (physician & outpatient costs) come from a different pool of money leading to sometimes terrible decision making on total costs. So now the cardiologist may decide to do a nuclear stress test in a hospital setting, with lower overhead for him, rather than pay for the machine, etc. This could mean $1000′s of dollars in additional costs to Medicare.
For example, one patient I’m aware of receives outpatient transfusion therapy every six weeks that cost BC/BS about $120,000 a year. After he went on Medicare, no one will do it on an outpatient basis because either a physician is required on site, or the reimbursement too low. The cost to Medicare is now about $250,000 a year.
A second problem is how Part B (not A) works in capping total reimbursement to all physicians for all RVU’s. They take a pot of money, divide by total expected RVU’s for all physicians, and that’s how they calculate the payment per RVU. This means that any new procedure with higher RVU’s will necessarily be over-performed by the specialty that has access to it, since it is more lucrative than cognitive and other older servies.
There will be a redistribution of income in the medical community. Even if iit is justifed, this would not ebb the push back. No one will volunteer to surrender income and nor will he give it up willingly. This is a zero sum game. Rough days ahead. Once physicians are divided on important issues, such as compensation, then we lose what little influence we have.
“Once physicians are divided on important issues, such as compensation, then we lose what little influence we have.”
The house of medicine will probably be divided and remain that way for years. Now that the primary care docs know how the specialists on the RUC committee have been screwing them for years, they will not have any sympathy for reinterpretations like this and will cheer the changes.
And that’s exactly my point.
And let’s analyze the “adjustment” medicare blessed me with, because I was so unfairly underpaid before : let’s say they pay me 5$ more per visit. Out of 20 patients a day, 30% have Medicare, let’s say 7. So I make 35$ extra a day for 22 days a month, that is 770 $ extra a month.
My malpractice increased by 3000 $ since last year, my rent by 1000 $. The increase of government associated fees is at least 300 $, hospital reappointment fees went up as well… the result of this reimbursement increase is a drop in a bucket… Medicare is the biggest blackmailer in the history of american medicine.
You know what this “adjustment’ is for primary care ? The last cigar that the guard gives to a prisoner before execution.
I have reached the banks of the River Styx. Money is not a consideration, however can any one of the correspondents above justify why a patient with stable coronary artery disease receive an annual nuclear imaging study and an ECHO while care of their lipids, diabetes and other risk factors that improve the quality and quantity of their lives and in fact reduce their health care costs are relegated to Internists for fees that are barely recognizable.
This country has crappy health care out comes, while the politicians and our patients must absorb some of the blame the medical profession has done more to protect their financial health than the physical health of their patients.
Arguments that discussion of income disparities create physician disunity are specious. When has a cardiologist or even one of the corresponding gastroenterologists above ever bemoaned the plight of their colleagues in primary care?
Look at the course of human history revolutions the proverbial Madame DeFarge said “off with their heads” she spoke of the wealthy not the deprived
For several years, many Cardiologists and a minority of Radiologists have supplemented their income by OWNING imaging equipment AND interpreting the studies. What a physician makes from interpreting the study is FAR less than what they may make from owning the equipment (Professional vs Technical Fee). For years it has taken a remarkably small # of patients imaged on a piece of equipment to pay the lease or pay for it. This is changing. Hopefully this will help decrease self referral as an un-intended consequence.