Chapter 23 — Exercises

How to use these. Section B is arithmetic and you should do it on paper. Section F — charge setting — is judgment, and the one rule in it is the only thing in the chapter that is not a matter of opinion.

Show every calculation in two steps. Adjust each RVU component by its own GPCI, sum, then multiply. Summing first and applying one GPCI gives a wrong answer that looks right.

Section A — The three numbers (items 1–6)

A.1 Name the three numbers on Account 10-4471's line 1 and say what kind of thing each one is.

A.2 Which of the three can you compute? What do you need?

A.3 Which of the three requires reading a document you may not have?

A.4 Which of the three can nobody derive?

A.5 Why does this chapter spend most of its length on Medicare arithmetic when a commercial contract is what paid the claim? Give three reasons.

A.6 State the widest gap in the chapter, in one sentence.

Section B — RVUs and the formula (items 7–18)

B.7 Name the three RVU components and what each measures.

B.8 Which component has two published values? Why?

B.9 Which component is typically smallest and most geographically variable?

B.10 What is a work RVU used for besides claim payment?

B.11 Describe how an RVU value is established, in five stages.

B.12 Why does the chapter say RVU values are "comparative judgments, not measurements"?

B.13 What is a "potentially misvalued" code, and what can happen to it?

B.14 Compute the allowed amount: work 1.92, PE 0.89, MP 0.13; GPCIs 1.000 / 1.008 / 1.005; conversion factor \$32.7442. Show both steps.

B.15 Recompute with GPCIs of 1.050 / 1.120 / 1.400. What happened, and which component moved most in percentage terms?

B.16 Recompute the original with a conversion factor of \$31.0000. By what percentage did the payment change, and by what percentage did the conversion factor change?

B.17 What does the answer to B.16 tell you about why the conversion factor is fought over annually?

B.18 A code's work RVU increases by 4% and its payment falls. Explain how, naming the mechanism.

Section C — GPCIs, the conversion factor, and rulemaking (items 19–26)

C.19 What does a GPCI of 1.000 mean?

C.20 Do GPCIs adjust cost or value? Why does the distinction matter?

C.21 How many conversion factors are there in the physician fee schedule?

C.22 What does budget neutrality require, and what does it do to the RVU pool?

C.23 Explain how "Medicare increased payment for X" and "Medicare cut payment overall" can both be true of the same rule.

C.24 Name the four stages of the annual rulemaking cycle and roughly when each occurs.

C.25 What does the final rule contain that explains the changes?

C.26 (Chapter 22) Name the other two open public processes this book has described. What do all three have in common?

Section D — Site of service (items 27–34)

D.27 In which RVU component does the site-of-service differential live?

D.28 Why does a facility-based service pay the physician less?

D.29 Does the difference disappear? Where does it go?

D.30 Which claim field selects the value?

D.31 Give the place of service code for: office · inpatient hospital · on-campus outpatient hospital · emergency department · ambulatory surgical center.

D.32 A practice is acquired by a hospital and converted to a provider-based department. What changes about the place of service code and about the physician's payment?

D.33 A wrong place of service code produces a wrong payment. Name both directions and the compliance consequence of each.

D.34 Give the detection query.

Section E — Building and comparing (items 35–40)

E.35 Write the full formula.

E.36 Using Account 10-4471's figures, compute Northfield Mutual's percentage of Medicare for each of the four lines.

E.37 Compute the blended percentage across all four.

E.38 State the finding in one sentence.

E.39 Two practices sign the identical contract. One does more E/M; one does more laboratory. Do they realize the same rate? Explain.

E.40 Describe how you would actually evaluate a contract offer. What do you need, and how long does it take?

Section F — Charges (items 41–52)

F.41 State the one rule that governs charge setting.

F.42 A charge is \$90 and the allowed amount is \$96.52. What is paid?

F.43 Is a low charge generous to the patient? Explain, naming what the patient's share is computed from.

F.44 Does a very high charge increase payment from a contracted payer? What does it do instead — name three things.

F.45 (Q6) Why did Northgate charge \$185.00? Give the honest answer.

F.46 Is \$185.00 a multiple of Medicare? Compute the ratio for all four lines and state what you find.

F.47 What is the one thing Northgate's charge is doing correctly, and is it doing it on purpose?

F.48 State the six steps of a defensible charge-setting method.

F.49 Which step fixes the distortion that across-the-board increases create? Explain the mechanism.

F.50 State the charge uniformity principle.

F.51 Name three practices that are permitted despite it, and the condition attached to all three.

F.52 Name two exposures.

Section G — Chargemaster and charge capture (items 53–60)

G.53 How does a hospital chargemaster differ from a physician fee schedule? Name three ways.

G.54 Name four mechanisms by which a chargemaster decays. (Chapter 20) Which does A4550 illustrate?

G.55 What must hospitals publish under price transparency requirements?

G.56 Name one thing that became possible as a result that was not possible before.

G.57 For an uninsured patient, what is the chargemaster? Name three mechanisms that respond to that.

G.58 Name five places charges are lost.

G.59 Why is a lost charge the only failure in this book with no evidence at all? What follows about detection?

G.60 Name the four reconciliation comparisons. Which one is one join and should be built first?

Section H — Collection rates (items 61–64)

H.61 Define gross and net collection rate.

H.62 A practice doubles its charges. What happens to each ratio, and what happened to its performance?

H.63 A practice has a four-year silent underpayment. What does it do to the net collection rate? Explain the mechanism.

H.64 A practice reports 98.5% net collection. Name three serious problems consistent with it, say what the ratio actually measures, and name the three measurements that answer the questions it cannot.