22 June 2006

BIG news for ER docs

The Center for Medicare Services (CMS) has just released the 2007 RVU values for the Emergency Department E/M codes. See here for the happy details, but the upshot is that the RVUs allocated to the ED codes have increased dramatically.

This is all thanks to the hard work of the guys in ACEP's Reimbursement Committee. They have been active advocates for Emergency Physicians in the house of medicine, and it is by their efforts that working ER docs will now get paid better for the hard work that they do. Specifically, much thanks to Mike Bishop, MD, and Dennis Beck, MD who represented us so ably on the Relative Value Update Committee (RUC), and to Dave McKenzie, the ACEP Reimbursement Guru.

How did they do it? The RUC is a committee which, under the aegis of CMS, brings together representatives of all the medical specialties to set the RVU value of each and every CPT code. Each set of CPT codes are updated at intervals of every 10 years (if I recall correctly). So it is not often that we have the opportunity to make our case that our RVUs should be more highly valued than they have been, and the audience to which we have to make this argument is . . . all the other specialties, who need to be convinced to give some of their RVUs to us. Not an easy task -- there is only a fixed pool of RVUs available.

The line of reasoning chosen was that the practice of Emergency Medicine has changed over the past decade. Patients are older and sicker and require more effort to work up. More workups are being done in the ED rather than upstairs or in the office. EDs are more overcrowded due to the contraction of the number of ED beds nationwide, resulting in longer ED stays and care delivered in the hallways. And EDs are used to board admitted patients, sometimes for days. In short, a complex ED patient requires more work now than ten years ago. (Note that this line of reasoning does not even touch upon malpractice, EMTALA, or charity care; these topics were verboten.)

This was a successful line of reasoning which resulted in the value of a level 4 evaluation increasing 31%, and a level 5 increasing 24%. Given that these are the two most common (and most valuable) codes, that's a massive increase. The level 3 increased modestly ~9%. Level 1 and 2 increased dramatically, 36% and 60%, but those codes were stragely undervalued before, and are pretty uncommon in any event, so the impact of that change is minimal.

So, what does this mean to your practice?

Well, it depends on your case mix. The higher the acuity at your facility, the bigger the impact. But it is likely to be big. For example, our facility sees a relatively high-acuity mix: Critical care - 5%; Level 5 - 17%; Level 4 - 34%; Level 3 - 40%; Level 1&2 - 4%. My prelimimary estimate is that this will result in an increase of 22% in total work RVUs billed -- or an increase of 16% for total RVUs, when you include the PLI and practice expense components. Since our contracts are all based upon RVUs, that should translate into a cool 16% increase in revenue. Same patients, same documentation, same contracts: 16% more money. Given that this is overhead-free money (except for collection costs), it probably will result in an even larger proportionate increase in provider compensation, maybe 20%.

It seems too good to be true. I'm so accustomed to getting screwed by the system again and again, getting squeezed from every which direction, that I can't quite believe that something this good would actually happen. I'm sure not banking on that extra revenue! I wonder if we'll get pushback from commercial payors. It's hard to imagine the Blues blithely shelling out an extra 16% for the same services. But unless they decide not to follow Medicare, I don't see how they could get around it. And an important caveat is that this is not final until CMS signs off on the committee's recommendation (though it would be pretty shocking if they did not). And in any event, it doesn't take effect till 2007.

And we won't get another "raise" for ten years. Sigh. Reality sets in.

Update -- more here.

[Obligatory disclaimer: I too believe that the RVU system is broken -- that it grossly underpays primary care providers, overcompensates procedures, and that this is a major cause of the dysfunctional nature of the US health care system. I further acknowledge that specialists, including ER doctors, are well compensated to begin with. It's not every day that a boy gets a 20% potential pay raise. Let me enjoy it.]


Allen said...

Nice Post!

(Crosses fingers, knocks on wood.....)


Jim said...

Wow, I can't believe this hasn't gotten more replies. This is HUGE. Thanks for the heads up!


kim said...

Fantastic. ER docs earn every penny and they should be earning a lot more.
Ten years between raises is a bit tough, but I'm happy to see this bit of news on behalf of the ER docs I work with.