Ch. 3: Medicare Payments: Physicians (p. 52)

Question 1

What are the components of price adjustment?

Answer 1

RVU: Work, Practice Expense, Malpractice
x
Geographical Cost Index
=
Product.

Product x Conversion Factor = Approved Charge.

Question 2

What are differences in payments between participating v. nonparticipating physicians?

Answer 2

Participating: physician accepts Medicare’s payment for services as payment in full, and will bill patient only for coinsurance or copayment portion only.

Nonparticipating: physician can choose to accept assignment on case-by-case basis.

Drawbacks:
A. if physician chooses to reject assignment, then max amount to be collected (all from patient) would be 115% x (95% x fee schedule amount);
B. if physician chooses to accept assignment, then amount to be collected would be 95% x fee schedule amount (80% from Medicare and 20% from patient).