The National Electrical Manufacturers Association (NEMA) has submitted formal comments regarding the U.S. Centers for Medicare and Medicaid Services (CMS) proposal notice (Federal Register, June 29, 2006, Vol. 71:139) to change its practice expense methodology for determining work relative value units (W-RVUs) under its physician fee schedule.
The Rosslyn, VA-based industry group said it was not consulted in CMS' proposal to move toward a "bottom up" methodology in determining direct costs, and suggested that the agency's Practice Expense Advisory Committee (PEAC) confer with representatives of technical component providers in that process. It also requested CMS to review the impact of this new methodology, specifically on the technical component, to ensure the payments are stable.
NEMA also urged CMS to maintain current allowances for cardiac catheterization provided in nonhospital settings, bone densitometry procedures, and cardiac monitoring services until the direct cost data can be confirmed.
The association also commented that it is concerned that CMS may have made errors in the practice expense per hour (PE/HR) calculations when adjusting the PE/HR figures to calendar year (CY) 2005 values. NEMA said it would be useful for CMS to show the increase in number for each year for each specialty's PE/HR, rolling up to 2005, and that this needs to be corrected prior to the final rule. It also believes that, to the extent these calculations reveal errors in the PE/HR calculations, CMS should republish for comment any necessary revisions to the proposed CY 2007 allowances.
NEMA said that its understanding is that the practice expense budget neutrality/scaling adjustment is already considerably larger than the 10% reduction in W-RVUs proposed. It stated that it would be unfair to further reduce Medicare payment for technical component and other PE-RVU-heavy services by shifting part of the five-year review budget neutrality adjustment to these services.
The industry group also objected to the use of W-RVUs as an allocator for indirect costs, as that substantially disadvantages technical component services, since technical component services have no W-RVUs. It said that it does not believe that there is any evidence that a service's W-RVUs are related to the indirect practice costs (such as overhead and administrative costs) involved in providing that service.
NEMA said it has asked CMS to:
- Finalize its proposal to use nonphysician staff time in lieu of physician work for technical component and other services with no physician work RVUs.
- Consider eliminating the "direct adjustment" to direct costs that has the effect of further reducing the impact of direct costs as an indirect cost allocator.
- Reconsider the issue if any changes are made to direct cost data or methodologies that have the impact of significantly reducing Medicare payment for technical component services.
By AuntMinnie.com staff writers
August 23, 2006
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