The conversion factor game

Well it looks like 2012 is going to be déjà vu for the physicians who experienced multiple changes to the conversion factor in 2010.

The conversion factor is a national dollar amount CMS uses to convert relative values into fee schedule amounts. When the fee schedule was first developed in 1992, the conversion factor was updated annually in the physician fee schedule final rule.  The conversion factor is set according to a statutory formula which was relied upon for several years until the update to the conversion factor started to result in a decrease rather than an increase.

In 2011, the conversion factor was $33.9764.  In the November 28, 2011 edition of the Federal Register, it was announced that the conversion factor for 2012 would be $24.6712.  Yikes!

If you will recall, in 2010, information about the conversion factor came to us incrementally.  We were advised that instead of the drastic cut that was projected to take place on January 1,2010, the conversion factor  would remain the same for January and February.  We received several more updates on the conversion factor until we finally made it through to the end of 2010.

Fast forward to 2012.  Some of you may have received notice from your Medicare Administrative Contractor (MAC) regarding the status of this year’s conversion factor.  If you look at the physician fee schedule on CMS’ website, you will see that the conversion factor has a “zero percent update for the period of January 1, 2012 to February 29, 2012”.  The 2012 physician fee schedule available online indicates the 2012 conversion factor is $34.0376, an increase of .0612 – or in other words, a zero percent increase.

CMS promises to work quickly to prevent the negative update from going into effect on March 1, if Congress passes the necessary legislation.  Surely Congress will take such action….eventually.  It remains to be seen if the action taken will be for the remainder of the year, or if we’ll just get incremental updates as we did in 2010.  Perhaps Congress will fix the broken statutory formula. Be on the lookout for more information coming from CMS.