Alta Partners News & Tips.  Information to Improve your Practice

Special Update:  Revision to Medicare Part B reimbursement for 2007


Below is a series of articles culled from the State of Ohio’s Medicare Part B carrier, Palmetto GBA, announcing that on December 20, 2006 President Bush signed a bill into law that reversed a mandated 5.1% DECREASE in the Part B conversion factor for 2007.  Instead, the conversion factor will be the same as was used in 2006, $37.8975 per RVU.  However, as you will quickly see, that does not mean that reimbursement in 2007 will be the same for the same CPT services as in 2006. 

During 2006, Medicare completed a review of their Relative Value Unit (RVU) factor scale used to value the level of “effort” expended (the review was last done in 1997).  As a result, many work RVU values for Evaluation and Management (E&M) services were increased significantly.  See the examples below:

CPT 99213 - Level 3 office visit                                     Work RVU increase of 37%
CPT 99223 - Level 3 (highest) initial hospital visit       Work RVU increase of 26%
CPT 99233 - Mid level subsequent hospital visit         Work RVU increase of 31%

This change, when all multiplied through results in the following increases in reimbursement for these same CPT codes:

CPT 99213 –  2007  $57.68     2006 $50.90                increase $6.78 or 13.2%
CPT 99223 –  2007  $170.75   2006 $154.54              increase $16.21 or 10.5%
CPT 99233 –  2007  $89.51     2006 $77.83                increase $11.68 or 15.0%

It’s safe to say that of all the specialties affected with the changes in 2007, internal medicine physicians will be smiling the most!

Below are links to the Palmetto GBA website if you would like to get the entire fee schedule online.  However, below you will see two schedules for your reference.  The first summarizes the movement in conversion factors over the past seven years and the second summarizes the movement in fees for the same CPT code between 2007 and 2006 for our most frequently used (60 or so) CPT codes.

Best wishes to all for a Happy New Year and a Healthy 2007.

Alta Partners, LLC 


What You Need to Know About the Tax Relief and Health Care Act of 2006

This article is based on Change Request (CR) 5448. The Tax Relief and Health Care Act of 2006 changes the update to the 2007 conversion factor for services paid under the MPFS, and this change is effective for services provided on or after January 1, 2007.

The Tax Relief and Health Care Act of 2006 set the 2007 conversion factor for physician payment at the same level as in 2006 ($37.8975), reversing the statutorily mandated 5.0 percent negative update. However, it does not maintain 2007 physician payments at 2006 levels. There are a number of other factors that affect payment rates for 2007.

Other changes adopted in the physician fee schedule final rule that affect 2007 payment rates include changes in the practice expense RVU-setting methodology, refinements to the practice expense RVUs, re-weighting of geographic adjustment factors, limits on payments for imaging services required by the Deficit Reduction Act, and other annual refinements including coding changes.

Both the Centers for Medicare & Medicaid Services (CMS) and your local Medicare contractor will display the resulting new fees on its Web site no later than December 31, 2006. The revised fees under the 2007 MPFS will be effective for services provided on or after January 1, 2007.

The change to the 2007 MPFS will also result in an extension of the participation enrollment period to February 14, 2007. Therefore, the participation enrollment period runs from November 15, 2006, through February 14, 2007. The effective date for any participation change is January 1, 2007.

Physicians who wish to sign an agreement and become Participating (Par) physicians can access the Par Agreement (CMS-460 form) from the CD which was mailed to all physicians last November. Physicians can also request the CMS-460 form from their local Medicare contractor. Existing Par physicians who no longer wish to be Par must notify their Medicare contractor in writing of their decision to terminate their Par agreement. Physicians who change their Par status during the extension period should begin to submit claims based on their new Par status.


  • Palmetto GBA will process claims with 2007 dates of service using the new fee schedules.  There will be no delays in processing claims.  We will not hold claims for 2007 dates of service because the new fees will be available to process these claims.
  • Revised fee schedules for Ohio for services paid under the MPFS are available at
  • We anticipate that CMS will release an article in the near future that provides more information about the changes associated with the Tax Relief and Health Care Act of 2006.  Palmetto GBA will publish this article on our Web site as soon as it becomes available.