Medicolegal Issues

Five-Year Review of Codes Begins


The Medicare Physician Fee Schedule indicates how much each physician service will be reimbursed by Medicare. Payment rates are a combination of three components: physician work, practice expense, and professional liability (malpractice). The Centers for Medicare and Medicaid Services (CMS) assigns relative value units (RVU) to each component, largely based on recommendations made by the Relative Value Update Committee (RUC).

Each billing code is to be reviewed at least once every 5 years to determine its RVU. The second Five-Year Review process has just begun and will review physician work RVU. By approximately March 15 this year, the American Medical Association (AMA) will have collected responses. Surveys will be sent to those specialty societies that expressed an interest in surveying the codes. Once the surveys are completed, specialty societies make their coding recommendations to the AMA. The Society of Hospitalist Medicine (SHM) will be making recommendations to the AMA in conjunction with our other colleagues who use similar codes.

Impact of Final Physician Fee Schedule Update on Medicare Payment for Selected Services click for large version

click for large version

In September, the recommendations are forwarded to the RUC for review. The RUC recommendations are then forwarded to CMS for consideration. Once CMS has completed their review, they typically publish a Notice of Proposed Rulemaking (NPRM) on Five-Year Review in March (in this case, March 2006). The Final Rule is expected to be released November 2006, and the new physician work RVU assignments will be implemented January 1, 2007.

Many cognitive specialty groups began to organize before the current Five-Year Review process started, in order to more efficiently coordinate efforts regarding codes of mutual interest. SHM has joined other such specialties in signing on to a unified letter to CMS regarding this Five-Year Review.

The 2005 Physician Fee Schedule was recently released. Below are the rates for selected services frequently rendered by hospitalists.

Dr. Gorman can be contacted at

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