SOW_PFSASCSystemDes04132010dta.DOC

Analyses, modeling, and programming activity for the 2011 and 2012 updates to the Ambulatory Surgical Centers (ASC) Payment System and Medicare Physician Fee Schedule (PFS)

STATEMENT OF WORK

I. Background

Physician Fee Schedule - Since January 1, 1992, Medicare has paid for physicians' services under section 1848 of the Social Security Act (the Act), "Payment for Physicians' Services.'' Physician services include office visits, surgical procedures, and a broad range of other diagnostic and therapeutic services. These services are furnished in all settings, including physicians’ offices, hospitals, and ambulatory surgical centers. In some cases, nonphysician practitioners, such as nurse practitioners, may furnish physician services. Payments for physician services (about $80 billion in 2009) account for about 15 percent of total Medicare spending.

Medicare pays for physician services based on a list of services and their payment rates, called the physician fee schedule. In determining payment rates for each service on the fee schedule, the Centers for Medicare & Medicaid Services (CMS) considers the relative amount of work required to provide a service (work RVUs), relative expenses related to maintaining a practice (practice expense (PE) RVUs), and relative malpractice costs (MP RVUs). To calculate the payment for every physician service, the physician work, PE, and MP RVUs are each adjusted by a GPCI. The GPCIs reflect the relative costs of physician work, PE, and malpractice insurance in an area compared to the national average costs for each component. Payments are converted to dollar amounts through the application of a conversion factor (CF), which is calculated annually by CMS as required by law. While there are some additional payment adjustments, the formula for calculating the Medicare fee schedule amount for a given service and fee schedule area can generally be expressed as:

Payment = [(RVU work x work GPCI)

+ (RVU PE x PE GPCI)

+ (MP RVU x MP GPCI)] x CF

Ambulatory Surgical Centers - The Medicare Modernization Act of 2003 required CMS to develop and implement a new payment system for ambulatory surgical centers (ASCs) no later than January 1, 2008. The final regulations governing the new payment system were published in the Federal Register in July, 2007. The ASC payment system is updated annually. The process includes updates to the ASC payment categories, relative payment weights, and the wage and other adjustments made by CMS to take into account changes in medical practice, the addition of new services, new cost data, and other relevant information. The annual update is made on a calendar year basis, through rulemaking.

Payment rates under ASCs need to be adjusted for a variety of factors, including the ASC mix of services and the geographic dispersion of ASCs. These factors must be determined annually using analytical files developed from ASC claims data. Payment rates for certain categories of ASC services are dependent upon the MFS rates for these services.

II.

Purpose

The purpose of this contract is to procure the services of a systems designer who has the expertise, knowledge, experience, and skills required to:

1 Maintain the complex structures of the ASC and MFS rate setting methodologies and to ensure that they function according to programmatic specifications and produce accurate output. This requires the unique skills and experience of a technical expert with unique skills and knowledge of both the ASC and PFS ratesetting and data. Some of the steps in the ASC and PFS rate setting methodology that the systems designer must ensure are correctly integrated include (but are not limited to) the following:

a Extraction of claims from the National Claims History file and creation of analytic files according to specifications provided by policy staff;

b Adjustments for geographic differences, budget neutrality, and discounting;

c Merging of multiple data files to create addenda and tables for publication in the Federal Register and/or posting on the CMS website;

d Construction of public use files and documentation for the public to model the ASC and MFS proposed updates.

2 Design, and supervise installation, testing, and validation of modifications in the ASC and PFS rate setting architecture that are required to comply with changes in statute, regulations, and policy for the 2011 and 2012 updates. This includes oversight of the revision of complex code to streamline the production of payment rates and ensure data quality. This requires someone with historical knowledge of the intricacies of the complex code used to develop the ASC and PFS payment rates.

3 Work with the ASC and MFS policy specialists to design, and supervise installation, testing, and validation of the routine analytic files and special studies that will be needed for the 2011 and 2012 updates such as--a Ensuring the budget neutrality of the new PFS malpractice payment rates;

b Modeling the ASC wage index adjustments;

c Mapping the claims data from prior years to account for new, revised and deleted codes;

d Oversight of special studies and provision of technical support to staff for mainstream and special studies and design and execution of studies of ASC and MFS data which are beyond the capacity of staff.

4 Work with CMS project officer and other contractors to assist in the study of the effects of changes in localities on PFS payments, including tasks such as—

a. Extraction of PFS claims data for several different time periods,

b. Clean data at the zip code and county level,

c. Summarize to create analytic files to model various locality configurations,

d. Provide other CMS contractors with explanation of the CMS internal programs and processes related to calculating payment rates,

e. Provide programming assistance to CMS contractors when approved by project officer,

f. Conduct other analyses required to ensure the success of cross component research on geographic adjustments.

5 Work with CMS project officer and other contractors to assist in the study of the effects of changes in one of the primary data analytical tools for the PFS and ASC payments, the Part B Analytics and Reporting system. This data system and other like it are integral to the development of payment policies for the PFS and ASC payment systems. This task includes—

g. Identifying potential improvements to the system, including data quality control

h. Working with the responsible IT professionals and contractors to resolve deficiencies as they are identified.

III.

Tasks

The contractor shall perform the following tasks for the 2011 ASC and Physician Final Rules, the 2012 ASC and Physician Notices of Proposed Rulemaking, and the 2012 ASC and Physician Final Rules:

1 Design, and supervise installation, testing, and validation of the ASC and MFS rate setting architecture in compliance with applicable statute, regulations, and policies for the 2011 and 2012 ASC and MFS payment systems.

2 Train CMS staff to transfer documentation, background, specifications, and technical knowledge related to the ASC and MFS rate setting infrastructure, including the provision of hands-on training and support to facilitate transfer of rate setting system modifications to CMS staff.

3.

Work with the ASC and MFS policy specialists to design, and supervise installation, testing, and validation of the routine analytic files and special studies that will be needed for the 2011 and 2012 updates.

3.

Evaluate and suggest improvements to the Part B Analytics and Reporting system and related systems to ensure accurate payments and appropriate payment policies under the ASC and MFS payment systems.

II. Schedule of Deliverables

1. Kick-off meeting with the project officer and appropriate CMS staff within 3 days of date of contract award to discuss the proposed tasks prior to the contractor initiating work.

2. The contractor shall work with CMS staff and report verbally to CMS on the progress of the project. The contractor’s reports will detail all work accomplished since the previous report. At a minimum, such reports shall:

a. Review project status and accomplishments relative to the project’s schedule.

b. Discuss significant problems encountered or anticipated and their impact on the project schedule and goals.

c. Include the contractor’s plans for resolving significant problems and, as appropriate, propose new project delivery and/or completion dates.

d. Include a discussion of substantive findings to date.

3.

Architecture (programs, files, documentation) for the ASC rate setting process and for modifications to the rate setting process for the CY 2011 and CY 2012 updates. This includes evaluation of the Part B Analytics and Reporting system and related systems as they relate to the rate-setting process.

4.

Architecture (programs, files, documentation) for the PFS rate setting process and for modifications to the rate setting process for the CY 2011 and CY 2012 MFS updates. This includes evaluation of the Part B Analytics and Reporting system and related systems as they relate to the rate-setting process.