AAFP chart details increases in primary care
CPT codes for 2011

Declining conversion factor should have little effect on family physicians

AAFP News Staff

CMS’s release of the final 2011 Medicare conversion factor, which decreased from 2010, has caused a lot of confusion and consternation among family physicians. To allay those concerns, the Academy has created a chart that shows why family physicians actually may see payment increases in 2011.

Members should be aware, however, that payment allowances in the chart are not adjusted geographically. According to Kent Moore, AAFP’s manager of health care financing and delivery systems, actual payment rates for providing Medicare services will vary according to the Medicare locality where services are performed because geographic practice cost indices also have been updated.

Moore noted that many physicians expected that their Medicare payments for 2011 would remain the same because Congress extended the payment rate that was in place for the second half of 2010 through the end of 2011. Expectations were that payments would remain the same and there would be no change in the conversion factor applied to payments, he told AAFP News Now.

However, Moore added, “CMS instituted a number of changes in the payment formula, including rebasing the Medicare economic index, increasing some of the payment codes and recalculating the figures for practice expense.” These changes would have resulted in increased costs to the Medicare program, but any changes to the program must remain budget-neutral. Thus, CMS was forced to apply a negative adjustment to the overall conversion factor.

Although the actual 2011 conversion factor went down from $36.8729 to $33.9764, changes in relative value units, or RVUs, have resulted in an overall increase in the Medicare allowance for the CPT codes family physicians use the most. In fact, Medicare allowed charges for family medicine are expected to increase in 2011 by about 2 percent to 3 percent, said Moore.

For example, according to the AAFP chart, the allowance for CPT code 99212 went up 4.09 percent. The allowance for CPT code 99213 went up 3.34 percent, and for CPT code 99214, it went up 2.35 percent. In addition, Moore noted, many family physicians will receive an additional 10-percent bonus because of provisions in the Patient Protection and Affordable Care Act.

Many physicians look at the conversion factor to compare their potential revenue from year to year, said Moore. “They see a declining conversion factor and assume their claims will decline by the same amount. But, in fact, the payment formula is increasing payments to primary care, sometimes at the expense of services provided by other, higher-paid specialties.”

Source: AAFP News Now, Jan. 17, 2011. © 2011 American Academy of Family Physicians.