Since January 1, 1992, Medicare has paid for physicians' services
under section 1848 of the Social Security Act (the Act), ``Payment for
Physicians` Services.'' The Act requires that payments under the
physician fee schedule (PFS) be based on national uniform relative
value units (RVUs) based on the resources used in furnishing a
service. Section 1848(c) of the Act requires that national RVUs be
established for physician work, practice expense(PE), and malpractice
expense. Prior to the establishment of the[[Page 70119]]resource-based
relative value system, Medicare payment for physicians' services was
based on reasonable charges. Section 1848(c)(2)(B)(ii)(II) of the
Act provides that adjustments in RVUs may not cause total physician
fee schedule payments to differ by more than $20 million from what
they would have been had the adjustments not been made. If adjustments
to RVUs cause
expenditures to change by more than $20 million, we must make
adjustments to ensure that they do not increase or decrease by more
than $20 million.B. Development of the Relative ValueSystem1. Work
RVUs The concepts and methodology underlying the PFS were enacted
as part of the Omnibus Budget Reconciliation Act (OBRA) of 1989,Public
Law 101-239, and OBRA 1990, (Public Law 101-508). The final rule
published November 25, 1991 (56 FR 59502) set forth the fee schedule
for payment for physicians' services beginning January 1, 1992.
Initially, only the physician work RVUs were resource-based, and thePE
and malpractice RVUs were based onaverage allowable charges. The
physician work RVUs established for the implementation of the fee
schedule in January 1992 were developed with extensive input fromthe
physician community. A researchteam at the Harvard School of Public
Health developed the original physician work RVUs for most codes in a
cooperative agreement with the Department of Health and Human Services
(HHS). In constructing the code-specific vignettes for the original
physician work RVUs, Harvard worked with panels of experts, both
inside and outside the government, and obtained input from numerous
physician specialty groups. Section 1848(b)(2)(A) of the
Actspecifies that the RVUs for radiology services are based on a
relative value scale we adopted under section 1834(b)(1)(A) of the
Act, (the American College of Radiology (ACR) relative value scale),
which we integrated into the overall PFS. Section 1848(b)(2)(B) of the
Act specifies that the RVUs for anesthesia services are based on RVUs
from a uniform relative value guide. We established a separate
conversion factor (CF) for anesthesia services,and we continue to
utilize time units as a basis for determining payment for these
services. As a result, there is a separate payment methodology for
anesthesia services. We establish physician work RVUs for new and
revised codes based on recommendations received from the American
Medical Association's (AMA) Specialty Society Relative Value Update
Committee (RUC).2. Practice Expense Relative Value Units (PE RVUs)
Section 121 of the Social Security Act Amendments of 1994 (Pub. L.
103-432), enacted on October 31, 1994, amended section
1848(c)(2)(C)(ii) of the Act and required us to develop resource-based
PE RVUs for each physician's servicebeginning in 1998. We were to
consider the staff, equipment, and supplies used in the provision of
various medical and surgical services. The legislation
specificallyrequired that, in implementing the new system of PE RVUs,
we apply the same budget-neutrality provisions that are applicable to
other adjustments under the physician fee schedule. Section 4505(a)
of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), amended
section 1848(c)(2)(C)(ii) of the Act to delay implementation of the
resource-based PE RVU system until January 1, 1999. In addition,
section 4505(b) of the BBA provided for a 4-year transition period
from charge-based PE RVUs to resource-based RVUs.
A 4 YEAR CEASE ON ADMISTRATION OF BOTOX UNTIL FURTHER STUDY ON AFFECTS
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