Apr 11, 2018
Key data used to set practice expense (PE) payment rates under the Medicare Physician Fee Schedule have not been updated since 2008, though the U.S. economy and health care system have changed since then. There are concerns that continued reliance on these data might result in misvalued PE rates. In this report, the authors address how the Centers for Medicare and Medicaid Services can improve the methodology or update data used to set PE rates.
In this report, the authors address how the Centers for Medicare and Medicaid Services (CMS) can improve the methodology or update data used for setting practice expense (PE) rates for payments made under the Medicare Physician Fee Schedule (MPFS). The current system for setting PE payment rates relies, in part, on data collected in the Physician Practice Information (PPI) Survey, which generally reflects information from 2006. Because of changes in the U.S. economy and health care system since that time, there are concerns that continued reliance on measures that use PPI Survey data might result in misvalued PE rates. To the extent that future payment systems use MPFS rates as a starting point, misvalued PE rates might be problematic if they are not updated.
The research in this report, which is part of the second phase of a study, can be divided into three broad topics. First, the authors consider how updated PE data could be collected through a new large-scale national survey effort to replace the PPI Survey. Second, the authors consider a new framework for allocating PE, which they developed to better capture variation in PE resources that are required to provide services covered in the MPFS. Finally, the authors continue work begun in Phase I of the project and documented in a previous report, Practice Expense Methodology and Data Collection Research and Analysis, investigating the potential to make use of data collected to set rates in the Outpatient Prospective Payment System (OPPS). Throughout the report, the authors focus primarily on indirect PE, which includes such expenses as administration, rent, and other forms of overhead that cannot be attributed to any specific service.
Considerations for Survey-Based Collection of Practice Expense
Practice Expense Components and Practice Characteristics
Survey Instrument Model
Technical Expert Panel Summary
An Alternative Framework for Allocating Indirect Practice Expense
Using Outpatient Prospective Payment System Relative Values to Determine Practice Expense
Detailed Methods and Additional Results of Environmental Scan
Practice Expense Types
Content of Previously Administered Practice Expense Surveys
Survey Instrument Model
Supplemental Information for the Outpatient Prospective Payment System Analyses
Steps of the Current Algorithm Used in the Practice Expense Rate Setting