April fools

Effective April 1, 2009, UnitedHealthcare (UHC) is implementing a new fee schedule that will impact approximately 70,000 physicians nationwide.  The effective date of this new fee schedule is not the only thing funny about it.  You’ll laugh until you cry.

Recipients of the new fee schedule were previously on what UHC termed a “progressive” fee schedule.  (Admittedly, the idea of any health plan, let alone UHC, having a “progressive” fee schedule is funny in and of itself.  But, I digress.)  That fee schedule featured a fixed conversion factor and relative value units (RVUs) that changed annually based on changes in RVUs in the Medicare physician fee schedule.

The new fee schedule is what UHC calls a “stated year fee schedule.”  Under this fee schedule, the physicians’ fees will be based on their existing conversion factors and 2008 Medicare RVUs and non-RVU based fees, and these values will not change on an annual basis.

In essence, affected physicians will have their fees from UHC frozen at their current rates. (No, this is not an April Fools Day joke.)

When asked about this fact, UHC staff responded that network physicians always have the right to initiate negotiations with UHC regarding their fees.  So, in effect, the fees are only frozen until the physicians negotiate an increase with UHC or the Cubs win the World Series, whichever comes first.

UHC's rationale for the change is that “recent congressional activity affecting Medicare payment to physicians has introduced new complexity to some of our existing contractual arrangements.”  The activity in question is Congress’ mandate that Medicare quit implementing budget neutrality adjustments by simply adjusting work RVUs. UHC had heretofore taken advantage of the adjusted Medicare RVUs, which were lower than the unadjusted RVUs mandated by Congress for 2009. Because of the congressional mandate, continuing to use Medicare RVUs and a fixed conversion factor as the basis for its “progressive” fee schedule would have meant a significant increase in expenditures for UHC.  Unable to handle this “new complexity” (“What?  We have to pay more?!?”) and in an effort to “stabilize” the methodology for its physicians, UHC decided to change its fee schedules.

“Stability through change.”   It’s the new oxymoron of our times.

In any case, UHC has assured affected physicians that they will “see no difference with this new fee schedule and your current reimbursement.”  Of course they won’t, because UHC is freezing their reimbursements at the 2008 level.  Now, if only they could freeze physicians’ cost of practice at the same time.

Of course, one thing more foolish than UHC’s new fee schedule and its rationale would be actually accepting it.