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Orthopedic Coding Alert

Guest Columnist:
Frank Cohen, CMPA - Determine Practice's Complexity Level to Normalize Stats

Figure out your acuity factor so you can compare apples to apples If HIPAA has become a source of pain for medical practices, then benchmarking should be a source of pleasure. But because your practice doesn't perform every procedure on the Fee Schedule, you need a strategy for comparing your practice's most commonly billed services  against data that list every procedure in CPT.

The answer is to explore a unique area called acuity factors (AF). Simply put, the AF measures the average level of complexity of the services and procedures that your practice performs, based on your patient population and physician records.

The AF uses the Resource-Based Relative Value Scale (RBRVS) as a foundation for its calculations. Because relative value units (RVUs), the unit of measurement for the RBRVS, are relationally accurate, you can use them to determine a procedure's AF.

Higher RVUs Represent More Physician Resources Assume that an RVU equals an associated unit of consumption. As the RVU increases, so do the resources that your practice devotes to the procedure. This is most obvious in E/M procedures - for example, 99204 carries more RVUs than 99201, consumes more resources and is generally accepted as being more complex.

Once you accept the fact that higher RVUs represent more difficult procedures, you can easily calculate the AF. Our primary rule is this: You must calculate AF by spe-cialty, regardless of whether you break it out by physician.
 
Step 1: You should create a table that contains the RVU values for every procedure you perform that has an RVU value.

Example: Just for the sake of the example, we'll list only the top-performed injection codes. Of course, your table should include all of the procedures that your practice performs. Or, if you plan to benchmark per physician, list on separate tables all of the procedures that each particular physician performs. Note: The RVUs listed below are fully implemented nonfacility totals but do not account for geographic pay differences.

Step 2: Multiply the RVU for each code by the reported frequency (the number of times that practices billed that code to Medicare).

Step 3: Compute the sum of the products for the "RVU x Frequency" column.

Example:                232,292
                                   34,681
                                 101,062
                                 185,610
                            +3,697,936
                                4,221,581 Step 4: Total up the frequency of the procedures in your table. Example:                          162,442
                                             24,253
                                             72,707
                                            122,112
                                       +2,009,748 
                                         2,391,262 
 
Step 5: Divide the grand total RVUs by the grand total frequency and your result is the ratio of RVUs per procedure, or the acuity factor. Example: 4,221,581 divided by 2,391,262 equals 1.77, which is the AF for this analysis. The national average AF for orthopedic physicians based on analyzing 100 percent of all Medicare claims is 2.74. Therefore, the practice in our [...]


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