With apologies for the stream of consciousness ...

Two major sources:  The first is clear - a 5.4% decrease in the conversion
factor that is essentially secondary to the downturn in the economy combined
with several other less significant factors ... i.e., the formula that
establishes the sustainable growth rate, etc., contains the GDP as a factor
... several other factors also weigh in ... a detailed discussion can be
found in the 11/1/2001 Federal Register (as well as the prior years final
rules) ... consequently, any downturn in the economy impacts all of Part B
... a large number of medical associations are actively working on a fix for
this problem, with bills having been introduced in both the House & Senate
with broad bipartisan support - Catch 22:  coming up with the estimated
$1.25 billion to fix it ...

The cause for the decrease in the zero-work pool is far less clear.  The
closest thing to an explanation that we have received from CMS is that there
has been some ill-defined change in utilization between 1999 & 2000 (the
base data years for 2001 & 2002 respectively).  If you're interested in
helping out with the search for a cause, the 1999 & 2000 CMS databases are
available on the CMS web site - however, at this point I've reviewed every
line item for the codes in the ZWP and simply failed to identify any obvious
cause (i.e., proportional shift in utilization between codes).  I feel
somewhat vindicated in this given the data folks at CMS have not been able
to identify an obvious cause either.  Interestingly, I did find several
"holes" in the data that we've discussed with CMS (& will continue to work
out) ... but that's another very long story for another day ... for "fun" =
check out the clinical staff time for 93307 in the time01 database & compare
with the CPEP inputs ...

After looking at the above, I probably should provide some explanation of my
perception of how the process works at CMS ... CMS obtains the data files
and simply feeds the data into the existing formula in their computers ...
the outcome is the outcome ... that is, they did not start with a decision
to reduce the magnitude of the ZWP ... from my perception of their
perspective, the formula exists in the computer, & they were as surprised as
we were with the result - which they, in fact, didn't notice until we
brought it to their attention ... i.e., they do not perform any significant
code-by-code analysis of the result prior to publication in the final rule
... obviously, buried somewhere in the combination of the data & formula for
the ZWP is something that is highly sensitive to relatively minor shifts in
utilization ...

Another side comment:  The reason we didn't pick up on the change in the
proposed rule is that it wasn't there ... i.e., the proposed rule was based
on the 1999 data, with the 2000 data not being available for utilization
until after publication of the proposed rule ... another issue that we're
discussing with CMS (doesn't seem right to change the rules in the middle of
the game - possible APA violation?) ... however, even if 2002 reimbursement
was based on the 1999 data, the impact would just be postponed one year ...

Bottom-line:  we need to find a fix for the ZWP - a very costly process
given some very good minds have been unable to identify an acceptable
alternative as yet (see the Lewin Report - CMS web site) ...

Franklin W. West
(425) 398-7774 (direct)
(425) 486-8976 (fax)
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-----Original Message-----
From: [log in to unmask] [mailto:[log in to unmask]]On
Behalf Of Paul Hrdlick
Sent: Friday, March 01, 2002 3:50 AM
To: [log in to unmask]
Subject: Re: Are we being phased out? -Reply -Reply

Does anyone out there know why these rates were dropped? What was their