2006 proposed fee schedule - American Society of Clinical Oncology

The sum of the scaled CPEP direct cost pool expenditures
equals the total scaled direct expense for the specific
procedure at the specialty level.
In the Step 3 example shown in Table 3, the SMS total
clinical labor costs for the specialty is $667,457,018.
This amount divided by the CPEP total clinical labor amount
of $858,924,008 yields a scaling factor of 0.78. The CPEP
clinical labor cost for hypothetical procedure 00001 is
$65.23. Multiplying the 0.78 scaling factor for clinical
labor costs by $65.23 yields the scaled clinical labor cost
amount of $50.69. Individual scaling factors must also be
calculated for supply and equipment expenses. The sum of the
scaled direct cost values, $50.69, $43.90 and $139.45,
respectively, equals the total scaled direct expense of
$234.04.
TABLE 3--Calculation and Application of Scaling Factors
Standard
Methodology
36
Clinical Labor Supplies Equipment
Total Scaled
Direct
Expense
(A) (B) (C) (D)
(a) Total - SMS Pool $667,457,018 $344,493,945 $531,094,831
(b) Total - CPEP Pool $858,924,008 $411,894,617 $5,929,275,023
(c) Scaling Factor 0.78 0.84 0.09
(d)
CPT 00001 -
$65.23 $52.49 $1,556.86
(e)
Unscaled Value
CPT 00001 - Scaled
Value
$50.69 $43.90 $139.45 $234.04
Step 4--Calculation of Indirect Expenses
Indirect PEs cannot be directly attributed to a
specific service because they are incurred by the practice