ACP disputes federal valuation of primary care observation codes

The American College of Physicians (ACP) has been engaged in the valuation process for many of the observation care codes since fall 2010. The College decided that because the codes had never been given a formal review by the American Medical Association's (AMA) Specialty Society Relative Value Scale Update Committee (RUC), they should be surveyed with participation from ACP members. The resulting activities (field surveys, presentations to AMA, and meetings with CMS) provide a real-life, concrete example of the development of valuation codes and the importance of the process.

The current cycle of surveys, value assessments, and payment determinations for the Current Procedural Terminology (CPT) code family of observation services can be thought of as a four-phase process:

• Phase I: ACP conducts surveys of services described by CPT codes, and recommends relative values to the RUC.
• Phase II: CMS publishes its proposed values for the services.
• Phase III: ACP considers the proposed values, and, along with other stakeholders, provides public comments to CMS.
• Phase IV: CMS considers all public comments, and then publishes the final values.

New CPT codes for subsequent observation care, 99224, 99225 and 99226, were introduced last year (see the January 2011 ACP Internist for more information). During the public comment period, ACP disputed the relative values CMS assigned to these codes, believing that they did not fully account for the physician work involved in providing the services. In July 2011, however, CMS finalized the relative values at the disputed levels. The 2012 relative work value units (RVUs) for the codes are shown:

• CPT code: 2012 RVU
• 99224: 0.82
• 99225: 1.45
• 99226: 2.17

Although the actual payment amount will change in 2012 if the conversion factor changes, the RVUs are final, and will determine the payment levels for subsequent observation care under the Medicare fee schedule for this year and following years.

The remaining codes in the family of observation care services (CPT codes 99218-99220 and 99234-99236) were recently surveyed and reviewed by ACP and other specialty societies and RUC. They are as follows:

• 99218: Level One initial observation care, per day, for the evaluation and management of a patient; low severity;
• 99219: Level Two initial observation care, per day, for the evaluation and management of a patient; moderate severity;
• 99220: Level Three initial observation care, per day, for the evaluation and management of a patient; high severity;
• 99234: Level One observation or inpatient hospital care, with admission and discharge on the same date;
• 99235: Level Two observation or inpatient hospital care, with admission and discharge on the same date;
• 99236: Level Three observation or inpatient hospital care, with admission and discharge on the same date.

ACP does not agree with the values that CMS has proposed for these codes (which are still being debated within the agency) believing that they are inadequate to appropriately compensate physicians for the work involved in providing observation care. ACP advocates that CMS reconsider the services' complete values and relativity before the RVUs are finalized and implemented for calendar year 2012. The final decisions from CMS are expected in late November.

ACP advocacy, along with members' input through their RUC survey responses, is critical to helping improve internal medicine physicians' recognition for the care they provide. Although CMS, so far, has disregarded ACP's recommendations for the observation codes, ACP will use the appeals and advocacy opportunities that are available to attempt to secure and stabilize appropriate values for these codes.

The College is striving to obtain updated and appropriate RVUs for all observation services, as it successfully did this year for preventive medicine services (CPT codes 99381-99397), with the assistance of other specialty societies. Although Medicare does not cover preventive medicine services, many other payers do. Therefore, publication of the values for CPT codes 99381-99397 provides a basis for other payers to use when setting their own fee schedules.

There will be more codes reviewed in the future and it will again be important for as many members are possible to participate in the Phase I surveys. The more survey data that ACP receives from its members, the stronger the foundation of our recommendations to CMS. If you receive an invitation to take part in an RUC survey, do take the opportunity. The surveys have a direct impact on the Medicare fee schedule. ACP's comments on the observation care codes can be viewed online.