MEDICARE RBRVS UPDATE AND PAYMENT INDICATORS

MEDICARE RBRVS UPDATE AND PAYMENT INDICATORS 2018

Following are two charts that can be used to determine payment for services provided to Medicare patients. These charts were originally developed based on information from the Centers for Medicare and Medicaid Services as of November 2, 2017. Any updates or changes after this date will be posted on the ACOG website at www.acog.org, under Health Economics, on the Coding webpage. Chart 1 and Chart 2 are used together to determine payment for a specific procedure performed in a specific location. The first chart is entitled 2018 Geographic Practice Cost Indices (GPCI) By Locality. The chart lists each state and some cities and the GPCI components for the area. The GPCI includes 3 components: physician work, practice expense, and professional liability. These components vary depending on where the service was provided. The assumption is that it will cost more to provide the same medical services in some places (such as Los Angeles) than in others (such as Casper, Wyoming). The GPCI functions to adjust payment to account for these differences. The second chart is entitled 2018 Medicare Relative Value Units and Payment Indicators. The chart lists CPT codes along with abbreviated code descriptions that are most commonly performed by obstetrician-gynecologists and includes 5 additional columns: column 1 lists relative value units (RVUs) for the specific code; column 2 lists the code s global surgical period; column 3 lists the percentage of the code s global package percent allocated to pre-operative, intra-operative and post-operative services; column 4 indicates whether payment will be adjusted for multiple or bilateral procedures; and column 5 indicates whether additional payment will be made for assistant surgeons or co-surgeons. The relative value units listed in column 1 do not reflect any adjustments that Medicare may apply to determine the allowable for a given physician, provider, or practice group. The left-hand side of the second chart lists CPT code numbers. Some of the code numbers include these symbols: + Indicates the code is a CPT add-on code ^ Indicates RVUs are not used for Medicare payment USING RELATIVE VALUE UNITS (RVUs) TO DETERMINE PAYMENT FOR A SERVICE The total RVUs for a specific service include three components: Physician work RVUs Practice expense RVUs Professional liability RVUs Chart 2, column 1 lists codes for services commonly performed by obstetriciangynecologists. This column is divided into sub-columns which list the code s physician work, practice expense, and professional liability RVUs. The practice expense sub-column is further divided into two parts: one used when the service is provided in a non-facility setting and one when it is provided in a facility setting. Sometimes, but not always, practice expense RVUs for a service are higher for non-facility settings than for facility settings. This is designed to capture the greater costs to physicians, such as costs of supplies or staff time, when a service is performed in the office rather than in

a facility. For example in 2018, code 58100 (endometrial biopsy) has a practice expense of 1.36 RVUs if performed in an office but 0.76 RVUs if performed in a facility. Use facility RVUs when a service is performed in an inpatient facility setting, a hospital ambulatory surgical center, or skilled nursing facility Use non-facility RVUs when a service is performed in any other setting (eg, physician office) ADJUSTMENTS MADE TO THE RVUS The RVU components are adjusted to determine payment for a specific service as follows: 1. RVUs are multiplied by the appropriate GPCI. The results are added together for the total RVUs. A. The physician work RVUs are multiplied by the physician work GPCI. B. The practice expense RVUs are multiplied by the practice expense GPCI. C. The professional liability RVUs are multiplied by the professional liability GPCI. The total RVUs are then multiplied by a conversion factor. The results determine the actual payment amount for the procedure. As of January 1, 2018, the conversion factor for 2018 is $35.9996. FORMULA TO DETERMINE REIMBURSEMENT The formula used to determine reimbursement is as follows: Work RVUs x Work GPCI + Practice Expense RVUs x Practice Expense GPCI + Professional Liability Expense RVUs x Professional Liability GPCI = Adjusted Total RVUs Adjusted Total RVUs x Conversion Factor = Reimbursement

Following are some examples of how Medicare reimbursement is determined in different settings (facility or non-facility) and different locations in the U.S. Total reimbursement values are not rounded up in the following examples. EXAMPLES FOR DETERMINING MEDICARE REIMBURSEMENT EXAMPLE 1: ENDOMETRIAL BIOPSY The total allowable for an endometrial biopsy (58100) performed in a physician s office and in a facility located in Wyoming is calculated as follows: Performed in Physician s Office in Wyoming RVUs GPCI RVUs Work 1.53 X.983 = 1.5039 Practice Expense 1.36 X 1.000 = 1.36 Professional Liability 0.19 X.880 = 0.1672 Total RVUs 3.08 3.0311 Total RVUs (3.0311) X Conversion factor ($35.9996) = $109.11 Performed in Another Setting in Wyoming RVUs GPCI RVUs Work 1.53 X.983 = 1.5039 Practice Expense 0.76 X 1.000 = 0.76 Professional Liability 0.19 X.880 = 0.1672 Total RVUs 2.48 2.4311 Total RVUs (2.4311) X Conversion factor ($35.9996) = $87.5186 The work and professional liability RVUs are the same regardless of where the service was provided. The practice expense RVUs differ depending on whether the service was provided in a facility (0.76 RVUs) or non-facility setting (1.36 RVUs). The total allowable for an endometrial biopsy (58100) performed in a physician s office and in a facility located in Los Angeles is calculated as follows: Performed in Physician s Office in Los Angeles RVUs GPCI RVUs Work 1.53 X 1.046 = 1.6003 Practice Expense 1.36 X 1.177 = 1.6007 Professional Liability 0.19 X 0.694 = 0.1318 Total RVUs 3.08 3.3328 Total RVUs (3.3328) X Conversion factor ($35.9996) = $119.97

Performed in Another Setting in Los Angeles RVUs GPCI RVUs Work 1.53 X 1.046 = 1.6003 Practice Expense 0.76 X 1.177 = 0.8945 Professional Liability 0.19 X 0.694 = 0.1318 Total RVUs 2.48 2.6328 Total RVUs (2.6328) X Conversion factor ($35.9996) = $94.77 The work and professional liability RVUs are the same regardless of where the service was provided. The practice expense RVUs differ depending on whether the service was provided in a facility (0.76 RVUs) or non-facility setting (1.36 RVUs). In addition, the GPCIs for Los Angeles are higher than the GPCIs for Wyoming, which changes the reimbursement. Therefore, an endometrial biopsy performed in a physician s office in Wyoming would be reimbursed at $109.11; the same procedure performed in a physician s office in Los Angeles would be reimbursed at $119.97. Therefore, an endometrial biopsy performed in a facility in Wyoming would be reimbursed at $87.51; the same procedure performed in a facility in Los Angeles would be reimbursed at $94.97. EXAMPLE 2: TOTAL ABDOMINAL HYSTERECTOMY WITH MARSHALL- MARCHETTI-KRANTZ (MMK) This procedure lists only one practice expense figure. This is because this procedure would rarely or never be performed in an office setting. The total allowable for a TAH with MMK (58152) performed in Wyoming would be: Performed in Any Setting in Wyoming RVUs GPCI RVUs Work 21.86 X.983 = 21.48 Practice Expense 10.71 X 1.000 = 10.71 Professional Liability 2.83 X.880 = 2.4904 Total RVUs 35.40 34.6804 Total RVUs (34.6804) X Conversion factor ($35.9996) = $1248.48 If this same procedure was performed in Los Angeles, the reimbursement would be more because of higher GPCIs.

Performed in Any Setting in Los Angeles RVUs GPCI RVUs Work 21.86 X 1.046 = 23.1716 Practice Expense 10.71 X 1.177 = 12.6056 Malpractice 2.83 X 0.694 = 1.9640 Total RVUs 35.40 37.7412 Total RVUs (37.8562) X Conversion factor ($35.9996) = $1358.66 The work, professional liability, and practice expense RVUs are the same regardless of the setting. However, the GPCIs for Los Angeles are higher than the GPCIs for Wyoming, which changes the reimbursement. Therefore, a TAH with MMK performed in Wyoming would be reimbursed at $1248.48; the same procedure performed in Los Angeles would be reimbursed at $1358.66. OTHER FACTORS THAT AFFECT PAYMENT Relative value units, GPCIs, and the conversion factor are not the only things that affect payment for a specific procedure. Other factors are listed in chart 2, columns 2-5. COLUMN 2: GLOBAL SURGICAL PERIOD The global surgical period is a specified number of days during which routine post-operative care is considered included in the code; therefore, routine services are not reported or reimbursed separately. After this period has ended, services can be reported and reimbursed. 0 Code includes routine postoperative services on the day of the procedure. 10 Code includes routine postoperative services for 10 days following the procedure. 90 Code includes routine postoperative services for 90 days following the procedure. XXX Global concept does not apply. This is used for nonsurgical codes such as E/M office visits. MMM The usual global concept does not apply. This is used for uncomplicated maternity care codes which include antepartum care, delivery, and postpartum care. ZZZ Global concept does not apply. This is used for codes that are part of another service, such as add-on codes. COLUMN 3: GLOBAL PACKAGE PERCENT DISTRIBUTION Sometimes a physician will provide only part of the global package for a procedure. In order to allow for reporting these partial services, the total RVUs for most procedures are divided into pre-operative, intra-operative, and post-operative care. For example, code 58550 (laparoscopic vaginal hysterectomy) is valued at 24.89 RVUs. Pre-operative care is valued at 12% or about 2.99 RVUs; intraoperative care is valued at 74% or about 18.41 RVUs; and postoperative care is valued at 14% or about 3.48 RVUs. A physician who provided only the intraoperative service will be reimbursed for 18.42 RVUs. Column 3 is divided into three sub-columns that list the different percentages for each of these components of the global package.

Pre-op lists the percentage assigned to the preoperative portion of the global surgical package, including a history and physical examination and obtaining consents. Report the CPT code with a modifier 56. Intra-Op lists the percentage assigned to the intra-operative portion of the global surgical package, including routine post-operative services provided in the hospital. Report the CPT code with a modifier 54. Post-op lists the percentage assigned to the post-operative portion of the global surgical package, including routine post-operative services provided in the office after discharge from the hospital. Report the CPT code with a modifier 55. COLUMN 4: PAYMENT ADJUSTED FOR Payment for some services is adjusted when the procedure is performed with other procedures during the same surgical session or when it is performed as a bilateral procedure. Column 4 is divided into two sub-columns to indicate possible adjustment under these circumstances. Multiple Procs: This sub-column indicates whether reimbursement is adjusted when multiple procedures are performed during the same surgical session. No indicates that total reimbursement is not adjusted when the procedure is performed on the same day as another procedure. Each service is reimbursed at the full amount. Yes indicates that total reimbursement is reduced when the procedure is performed on the same day as another procedure. The procedure with the highest number of RVUs is reimbursed at 100% of the allowed amount; other procedures are reimbursed at 50%. Endo indicates that total reimbursement is adjusted according to special endoscopic rules. This adjustment is made when a procedure is performed on the same day as another endoscopic procedure in the same family (ie, with the same base procedure code). If the codes are not in the same family (eg, a laparoscopic procedure and a hysteroscopic procedure), the endoscopic rules do not apply. Most hysteroscopy codes have a diagnostic hysteroscopy as their base code. Most laparoscopy codes have a diagnostic laparoscopy as their base code. The value of the base code is subtracted from the value of the second code reported. Base codes are listed in column 4 for endoscopy codes (eg, for code 58562, the multiple procedure sub-column reads: Endo, 58555). Example of Endoscopic Rules. Hysteroscopy codes 58562 (removal of foreign body) and 58561 (removal of leiomyomata) both have 58555 (diagnostic hysteroscopy) as their base code. Therefore, if 58561 and 58562 are performed in a facility during the same surgical session, the reimbursement is determined as follows: o Reimbursement for code 58561 is based on 10.30 RVUs, its full value o Reimbursement for code 58562 is based on 2.03 RVUs (its full value of 6.40 RVUs minus 4.37 RVUs, the RVUs for its base code 58555)

Therefore, reimbursement is based on 12.33 RVUs (10.30 plus 2.03). Image indicates that total reimbursement for the technical component of an imaging procedure is adjusted according to special rules. This adjustment is made when one imaging procedure is performed on the same day as another imaging procedure in the same family (ie, two ultrasounds). The higher valued imaging procedure is reimbursed at 100% for both the professional and technical components. For the second procedure, the professional component is reimbursed at 100% but the technical component is reimbursed at 75%. Example of Imaging Rules. Code 76857 is specified as an image code when performed with other ultrasound procedures. Therefore, if 76857 and 76830 are performed during the same session in an office setting, the reimbursement is determined as follows: o Reimbursement for code 76857 is based on 1.38 total RVUs, its full value (.67 RVUs for the technical component and.71 for the professional component) o Reimbursement for code 76830 is based on 3.48 total RVUs, (the full value of its professional component [.99 RVUs] and 75% of its technical component [75% of 2.49 or 1.86 RVUs]), for RVU values of.99 + 1.86 RVUs for a total of 2.85 RVUs o Therefore, total reimbursement when both codes are performed is based on 4.23 RVUs (1.38 RVUs for code 76857 plus 2.85 RVUs for code 76830) Bilateral Procs: This sub-column indicates whether payment for this service increases when the procedure is performed bilaterally. Most codes reported by obstetrician-gynecologists are considered unilateral and bilateral; that is, the code is reimbursed the same regardless of whether the service is performed on one side or both. Some codes (such as 58770, salpingostomy), however, are considered unilateral. When a unilateral procedure is performed bilaterally, additional reimbursement will be made. Yes indicates that total reimbursement is 150% when the procedure is performed bilaterally. See modifiers 50, RT, and LT. No indicates that total reimbursement is not adjusted when the procedure is performed bilaterally. COLUMN 5: ADDITIONAL PAYMENT FOR Medicare allows payment for assistants at surgery and/or co-surgeons for some procedures but not others. Column 5 is divided into 2 sub columns to indicate whether Medicare will pay the additional surgeon in these circumstances. Asst Surgeon If allowed, Medicare will pay an assistant surgeon 16% of the allowable amount; the primary physician will receive 100% of the allowable amount. Yes indicates that an assistant at surgery may be paid. Maybe indicates that an assistant at surgery may be paid if the medical necessity for the assistant is documented.

No indicates an assistant at surgery is never paid for this procedure. Co-Surgeon If allowed, Medicare will pay each co-surgeon 62.5% of the allowable amount. Yes indicates that co-surgeons may be paid without additional documentation if the surgeons are of different board-certified specialties. Maybe indicates that co-surgeons may be paid if the medical necessity for both surgeons is documented. No indicates co-surgeons are never paid for this procedure.

CHART 1 2018 Geographic Practice Cost Indices (GPCI) By Locality Locality Work Practice Expense Malpractice ALABAMA 0.979 0.890 0.492 ALASKA** 1.500 1.117 0.708 ARIZONA 0.980 0.971 0.834 ARKANSAS 0.971 0.872 0.576 CALIFORNIA Bakersfield, CA 1.020 1.074 0.599 Chico, CA 1.020 1.074 0.562 El Centro, CA 1.020 1.074 0.567 Fresno, CA 1.020 1.074 0.562 Hanford-Corcoran, CA 1.020 1.074 0.562 Los Angeles-Long Beach-Anaheim (Los Angeles Cnty), CA 1.046 1.177 0.694 Los Angeles-Long Beach-Anaheim (Orange Cnty), CA 1.046 1.177 0.694 Madera, CA 1.020 1.074 0.562 Merced, CA 1.020 1.074 0.562 Modesto, CA 1.020 1.074 0.562 Napa, CA 1.055 1.256 0.458 Oxnard-Thousand Oaks-Ventura, CA 1.024 1.176 0.673 Redding, CA 1.020 1.074 0.562 Riverside-San Bernardino-Ontario, CA 1.020 1.074 0.689 Sacramento-Roseville-Arden-Arcade, CA 1.025 1.086 0.562 Salinas, CA 1.024 1.092 0.562 San Diego-Carlsbad, CA 1.022 1.102 0.567 San Francisco-Oakland-Hayward (Alameda/Contra Costa Cnty), CA 1.075 1.325 0.421 San Francisco-Oakland-Hayward (Marin Cnty), CA 1.062 1.279 0.458 San Francisco-Oakland-Hayward (San Francisco Cnty), CA 1.075 1.325 0.421 San Francisco-Oakland-Hayward (San Mateo Cnty), CA 1.075 1.325 0.421 San Jose-Sunnyvale-Santa Clara (San Benito Cnty), CA 1.041 1.167 0.562 San Jose-Sunnyvale-Santa Clara (Santa Clara Cnty), CA 1.083 1.354 0.388 San Luis Obispo-Paso Robles-Arroyo Grande, CA 1.020 1.080 0.562 Santa Cruz-Watsonville, CA 1.026 1.132 0.562 Santa Maria-Santa Barbara, CA 1.028 1.108 0.562 Santa Rosa, CA 1.023 1.111 0.562 Stockton-Lodi, CA 1.020 1.074 0.562 Vallejo-Fairfield, CA 1.055 1.256 0.458 Visalia-Porterville, CA 1.020 1.074 0.562 Yuba City, CA 1.020 1.074 0.562 Rest of California* 1.020 1.074 0.562 COLORADO 0.996 1.018 1.042 CONNECTICUT 1.021 1.112 1.255 DC + MD/VA SUBURBS 1.045 1.205 1.261 DELAWARE 1.007 1.019 1.119

Locality Work Practice Expense Malpractice FLORIDA Fort Lauderdale, FL 0.983 1.012 1.797 Miami, FL 0.990 1.029 2.566 Rest of Florida 0.975 0.952 1.358 GEORGIA Atlanta, GA 0.998 0.997 1.088 Rest of Georgia 0.980 0.899 1.073 HAWAII/GUAM 1.001 1.146 0.614 IDAHO 0.962 0.902 0.512 ILLINOIS Chicago, IL 1.008 1.034 1.925 East St. Louis, IL 0.984 0.936 1.785 Suburban Chicago, IL 1.009 1.053 1.565 Rest of Illinois 0.982 0.919 1.208 INDIANA 0.969 0.919 0.379 IOWA 0.969 0.907 0.423 KANSAS 0.966 0.911 0.615 KENTUCKY 0.974 0.880 0.819 LOUISIANA New Orleans, LA 0.987 0.966 1.273 Rest of Louisiana 0.977 0.887 1.199 MAINE Southern Maine 0.980 1.007 0.670 Rest of Maine 0.970 0.922 0.670 MARYLAND Baltimore/Surr. Cntys, MD 1.023 1.095 1.295 Rest of Maryland 1.009 1.033 1.082 MASSACHUSETTS Metropolitan Boston 1.033 1.179 1.061 Rest of Massachusetts 1.020 1.067 1.061 MICHIGAN Detroit, MI 1.000 0.989 1.691 Rest of Michigan 0.978 0.919 1.018 MINNESOTA 0.998 1.011 0.362 MISSISSIPPI 0.961 0.870 0.370 MISSOURI Metropolitan Kansas City, MO 0.984 0.963 1.073 Metropolitan St Louis, MO 0.985 0.959 1.053 Rest of Missouri 0.961 0.863 0.993 MONTANA *** 0.965 1.000 1.631 NEBRASKA 0.970 0.910 0.318 NEVADA *** 1.002 1.017 0.909 NEW HAMPSHIRE 0.991 1.045 1.050 NEW JERSEY Northern NJ 1.041 1.180 0.938

Rest of New Jersey 1.024 1.123 0.938 NEW MEXICO 0.982 0.921 1.247 NEW YORK Manhattan, NY 1.052 1.180 1.615 NYC Suburbs/Long I., NY 1.041 1.205 2.149 Poughkpsie/N NYC Suburbs, NY 1.016 1.070 1.313 Queens, NY 1.052 1.200 2.121 Rest of New York 0.987 0.950 0.595 NORTH CAROLINA 0.975 0.931 0.695 NORTH DAKOTA *** 0.978 1.000 0.540 OHIO 0.990 0.917 1.005 OKLAHOMA 0.961 0.891 0.954 OREGON Portland, OR 1.010 1.054 0.783 Rest of Oregon 0.991 0.967 0.783 PENNSYLVANIA Metropolitan Philadelphia, PA 1.022 1.074 1.379 Rest of Pennsylvania 0.990 0.936 1.033 PUERTO RICO 0.998 1.007 0.990 RHODE ISLAND 1.027 1.050 0.999 SOUTH CAROLINA 0.977 0.912 0.553 SOUTH DAKOTA*** 0.961 1.000 0.389 TENNESSEE 0.976 0.901 0.526 TEXAS Austin, TX 0.994 1.021 0.747 Beaumont, TX 0.985 0.924 0.839 Brazoria, TX 1.020 0.997 0.839 Dallas, TX 1.012 1.014 0.768 Fort Worth, TX 1.007 0.986 0.747 Galveston, TX 1.020 1.011 0.839 Houston, TX 1.020 1.012 0.936 Rest of Texas 0.990 0.938 0.796 UTAH 0.980 0.927 1.165 VERMONT 0.979 1.015 0.595 VIRGINIA 0.992 0.986 0.908 VIRGIN ISLANDS 0.998 1.007 0.990 WASHINGTON Seattle (King Cnty), WA 1.027 1.146 0.931 Rest of Washington 0.997 1.011 0.902 WEST VIRGINIA 0.966 0.857 1.296 WISCONSIN 0.983 0.957 0.347 WYOMING *** 0.983 1.000 0.880

2018 GPCIs reflect the second year of a two-year update transition. * The 1.0 Work GPCI floor required by Section 201 of the MACRA of 2015 expires on December 31, 2017, therefore the Work GPCIs for 2018 do not reflect a 1.0 floor. **Work GPCI reflects a 1.5 floor in Alaska established by the MIPPA. ***PE GPCI reflects a 1.0 floor for frontier states established by the ACA.