HSA 6930 Practice Management

You are the administrator of FAU group practice. The practice has ten (10) providers. The board of Directors will be holding a one-day retreat to welcome two newly appointed members. The newly appointed members one is a banker, and one is a Lawyer. Provide a comprehensive overview of Relative Value Units RVUs: including RVU’s history, and its purposes of Relative Value Units.

Explain the components of RVUs: Work RVU (wRVU), Practice Expense RVU (peRVU), and Malpractice RVU (mpRVU).

Describe how the Medicare Physician Fee Schedule (MPFS) utilizes RVUs to determine reimbursement rates for services.

Describe (CPT) codes and Healthcare Common Procedure

Coding System (HCPCS) codes and their role in calculating physician reimbursement.

Use the current Medicare conversion factor (assume it is $34.89 for this exercise) to determine the reimbursement amount for both facility-based and non-facility-based scenarios.

ICD-10 (CPT) and HCPCS coding
❑HCPCS Codes (Healthcare Common Procedure Coding System)
Used in the classification of medical procedures and product not included in the
CPT codes
❑ Alphanumeric codes, divided into three levels:
• Level I: Identical to CPT codes.
• Level II: Used for products, supplies, and services not included in CPT (e.g., durable medical
equipment, prosthetics).
• Level III: used by state Medicaid agencies, Medicare contractors, and private insurers.
HCPCS used for Medicare and Medicaid billing.
Created and managed by the Centers for Medicare and Medicaid Services (CMS).
❑ CPT codes are more focused on procedures and services.
❑HCPCS have a broader range of items such as medical equipment and supplies.
❑ CPT codes are numeric.
❑ HCPCS codes are alphanumeric.
Components in determining payment using RVU methodology
Practice Expense rvu:
Rent-Supplies-StaffEquipment
Reimbursement = {(Total RVUs * Geographic location) * Cost Factor}
❖ All figures are provided by CMS
❖ RVU Cfactor for 2024 is set at $32.74 from $33.89 = (-3.4% or -$1.15)
❖ GPCI (Geographic Practice Cost Indices) from CMS:
❖ MPractice Miami: 2.500 Fort Lauderdale=1.770 & Rest of FL.=1.467
❖ Practice Expense: Miami = 1.027 Fort Lauderdale =.998 & Rest of
Florida =0.940
Malpractice Rvu:
Professional
Liability Insurance
Provider Wrvu : TimeSkill-Expertise-Intensity
Total RVU
❖ Geographic location
CPT-Codes for Colonoscopy based on location
Non Facility Compare within – Facility
You all could used Endoscopy for your calculations
RVUs – Non Facility
RVU Facility
• wRVUs
• PE RVUs
• MP RVUs
• wRvus *(GCPI)
• PE RVUs* (GCPI)
• MP Rvus (GCPI)