2006 proposed fee schedule - American Society of Clinical Oncology

● The unscaled indirect expense amount, at the
procedure level, is multiplied by the specialty’s scaling
factor to calculate the procedure’s scaled indirect
expenses.
● The sum of the scaled indirect expense amount and
the procedure’s direct expenses yields the total PEs for the
specialty for this procedure.
In table 5, to calculate the indirect scaling factor
for hypothetical procedure 00001, divide the total SMS
indirect pool, $3,337,285,089 (calculated in
Step 1-Table 1)), by the total indirect expense for the
specialty across all procedures of $6,745,545,434. This
results in a scaling factor of 0.49. Next, the unscaled
indirect cost of $315.47 is multiplied by the 0.49 scaling
factor, resulting in scaled indirect cost of $156.07. To
calculate the total PEs for the specialty for procedure
00001, the scaled direct and indirect expenses are added,
totaling $390.12.
TABLE 5--Calculation of Indirect Scaling Factors and Total
Practice Expenses
Standard Methodology Indirect Costs Direct Cost
Specialty
Specific
Practice
Expenses
(A) (B) (C)
(a) Total – SMS Indirect Expense $3,337,285,089
(b)
Total Indirect Expense for all
Procedures (from Step 4)
$6,745,545,434
(c) Scaling Factor 0.49
(d) CPT 00001 - Unscaled Value $315.47
(e) CPT 00001 - Scaled Value $156.07 $234.04 $390.12
39