Regardless of the type of service provided, the UCR calculation is based on the medicine conversion factor category.
When using modifiers the unit value or UCR amount shold be increased or decreased based on the special circumstances which the modifier represents.
Since the assistant surgeon is not responsible for the preoperative or postoperative care, is not responsible for the life of the patient and only assists the surgeon during the surgery,
the assistant surgeon is paid at 20% of the amount allowed for the surgeon.
For standard adjustments on modifiers,
consult the CPT book
For those modifications not listed
the adjustment will vary according to the insurance carrier's policy and the contract provisions.
Fees are assigned according to the particular CPT code, and this is considered the allowable amount for that particular procedure.
If a fee schedule is used,
the claims examiner looks up the appropriate code to obtain the allowed amount. However, the compensation with the schedules is the same in large city as it is in outlying areas.
they are added to code to repeat particular facts.
RVS are to be adjusted for various locales by a geographic adjustment factor
what the insurance company considers to be a reasonable charge for the procedure performed.
Codes that identifies medical treatment or diagnostic services
Relative Value Study
Unit value for medical services
Reference book used for coding physician services.
a numerical value assigned by a relative value study to a porcedure code. The unit value is multiplied by the conversion factor to determine the UCR allowance of a basic allowance.
Usual Customary and Reasonable (UCR)
Insurance carriers limit payment to a specified amount based on the UCR system.
Omnibus Budget Reconciliation
Benefit plans define covered expenses as charges for the following services and supplies:
1. Those that are medically necessary for the treatment or diagnosis of an injury or illness.
2. Those that are ordered or prescribed by a licensed provider.
3. Those that do not exceed the usual, customary and reasonable (UCR) fee.
Costs in one area of the country are often much less than those in another area of the country
thus, insurance carriers began compiling data based on the usual amounts charged by doctors in different areas.
The RVS/Conversion Factor
system bases amounts on the procedure performed, the geographic location (zip code) of the provider of service's office and the date the service was performed.
Amounts in excess of UCR
are not considered to be an allowable expense under the plan and are therefore excluded froma ll benefit calculations.
UCR is usually applicable
only to professional services or to hospital billings that give CPT/RVS codes.
Not all procedures have a UCR fee
ie., new procedures,
experimental procedures and
very unusual and complex procedures
may not have an established UCR amount.
UCR can be established only when
enough procedures of a particular type have been performed in a geographic area to allow for an "average" or "usual" amount to be determined. Usually a minimum of 50 operations is required to provide even a rough estimate of the amount that should be considered as usual.
Reasons why a UCR amount will not be available:
* The Cpt code is a BR (By Report) procedure
* The code entered is an RNE (Relatively Not Established) procedure
* The code entered is not listed in the most recent CPT book because it is a new procedure.
Relative Value Unite (RVUs)
represent the total RVS for components of the schedule.
Components for resource-based RVS include:
Physician's Work Component
Overhead or Practice Expense Component
Malpractice or Professional Liability Component
Physicians Work Component
reflects the resources required to furnish the professional service, including the time and the intensity of effort.
Overhead or Practice Expense Component
reflects cusomary practice expenses (rent, slaries, staff, equipment cost and so on)
Malpractice ro Professional Liability Component
reflects the risk inherent in providing various procedures.
On a Basic-Major Medical plan, two limits must be calculated:
1. Basic allowed amount
2. Total plan or major medical allowed amount
The basic benefit
usually has a dollar conversion factor specified in the plan document.