2006 proposed fee schedule - American Society of Clinical Oncology

indirect expenses for this procedure of $132,055,728. The
process is repeated across all procedures performed by the
specialty, and the indirect expenses for each service are
summed to arrive at the total specialty indirect PE pool of
$6,745,545,434.
TABLE 4--Calculation of Indirect Expense
Standard Methodology
Physician
Work*
Total Direct
Expense
Total
(A) (B) (C)
(a) CPT 00001 $81.43 $234.04 $315.47
(b) Allowed Services 418,602
(c) Subtotal $132,055,728
(d) All Other Services $6,613,489,706
(e) Total Indirect Expense $6,745,545,434
*Calculated by multiplying work RVU of 2.36 by 1995 conversion factor of $34.5030.
Step 5--Calculation and Application of Indirect Scaling
Factors
Similar to the direct costs, the indirect costs are
scaled to ensure that the total across all procedures
performed by the specialty equates with the total indirect
costs for the specialty as reflected by the SMS data. To
accomplish this, the indirect costs calculated in Step 4
(Table 4) are scaled to SMS data. The calculation of the
indirect scaling factors is as follows:
● The specialty’s total SMS indirect expense pool is
divided by the specialty’s total indirect expense pool
calculated in Step 4 (Table 4), to yield the indirect
expense scaling factor.
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