Medicare Allowable Rates - MPFS Reimbursement 2019

By: Thomas Wright
Published: Wednesday, January 23 2019
Last Updated: 23 days ago

When it comes to government programs, it often feels like we need to learn a whole new language to understand what they’re trying to say. Take allowable rates for example, do you know what it means? No, this isn’t a test, so don’t worry if you don’t. Unless you’re someone involved in policy making, it’s unlikely you have a full understanding of just what the term stands for.

That’s what we’re here to help with. We’re here to help make sure you have a full understanding of what the Medicare physician fee schedule (MPFS) is, and what the rates are for 2019. So, the next time someone asks you what allowable rates are, you’ll be able to impress them with your newly acquired knowledge.

What Are Medicare Allowable Rates?

Medicare allowable rates, or what is also known as the Medicare Physician Fee Schedule, is a system that predetermines how much a specific medical procedure or service will cost. Allowable rates, or fees, are primarily released to help physicians and medical professionals alike, figure out how much they are allowed to charge Medicare beneficiaries for their services, and subsequently, how much they will get reimbursed for.

For example, as of the now the standard split between Medicare and beneficiaries is 80% and 20%. Meaning, for any covered services, Medicare will pay 80% of the bill, while the beneficiary will pay the remaining 20%. So, if there is a bill for $1,000 that a physician is supposed to get reimbursed for, Medicare will pay $800, while you, the beneficiary, will pay $200.

Allowable rates are a key component of Medicare, but not without controversy. The federal government believes that physicians should be appreciative of being members of the vast Medicare program. Basically, doctors are being forced to provide the government with a discount off their normal private fee schedules. In return, the federal government offers prompt payment to medical professionals.

How Reimbursement Rates Are Calculated

The United States Congress provide oversight to the Medicare program. Therefore, when new laws are passed, they will ensure that the new provisions are enacted. Day to day Medicare administration is conducted by the Centers for Medicare & Medicaid Services (CMS). The CMS is responsible for setting the exact Medicare reimbursement rates. In general, the CMS will make an estimation of the average cost for a provider, supplier or physician to provide a specified medical service or supply in their area.

Once a doctor accepts Medicare assignment, he tacitly agrees to the Medicare allowable rates. Medicare Advantage and Medicare Part D claims work differently - with these, Medicare pays the private insurance companies a predetermined amount each month.

Standard Rates

The CMS has stated that the Medicare physician fee schedule lists more than 10,000 healthcare services. The CMS is a good resource for those who want to conduct a fee schedule search. It is important to note that local geographical costs are also taken into consideration as part of the Geographic Practice Cost Index (GPCI).

Due to the Federal Reserve accumulates valuable local inflation statistics, it might also have some impact on GPCI calculation. The GPCI has been calculated for the following three components of a procedure's value:

The Relative Value Unit will adjust the Practice Expense based on each area's standard of life. The Malpractice component is a way to engage in risk management. It is interesting that as healthcare has become more national, it still has this very local component to it.

The CMS multiples the GPCIs times the RVU for each component to arrive at the total cost. There are also payment adjustment indicators for personnel or surgery type. The CMS physician fee schedule lookup website database allows people to find pricing amounts, RVUs or GPCIs using procedure codes.

What To Expect In 2019

The CY 2019 MPFS was placed on the Federal Register on November 1, 2018. Every year, the government has a public comment period of time. After this period, the fee schedule for 2019 was updated in its final form circa January 1, 2019.

Besides general payment policies and Medicare allowable rates, there was a specific focus on outpatient evaluation and management visits for 2019.

There were also 2 x newly defined doctor's services on the MPFS - these used cutting-edge communication technology. These Medicare reimbursement rates had to be calculated by the government.

For 2019, telehealth services have been expanded for Substance Use-Disorder Prevention that Promotes Opioid Recovery & Treatment (SUPPORT) under the "Patients & Communities Act." This made it easier for telehealth services to be provided to drug addicts. Telehealth was one of the issues highlighted by President Donald Trump. He wanted Medicare to make it easier for doctors to use technology to treat their patients. He also discussed house visits.

Changes From Allowable Rates In 2018

The CY 2018 Medicare physician fee schedule was placed on the Federal Register on July 12, 2018. The 2018 Medicare reimbursement rates updates focused on misvalued codes and the addition of telehealth list procedures.