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CMS-1403-FC
that time, PE RVUs were based on historical allowed charges.
This legislation stated that the revised PE methodology must
consider the staff, equipment, and supplies used in the
provision of various medical and surgical services in
various settings beginning in 1998. The Secretary has
interpreted this to mean that Medicare payments for each
service would be based on the relative PE resources
typically involved with furnishing the service.
The initial implementation of resource-based PE RVUs
was delayed from January 1, 1998, until January 1, 1999, by
section 4505(a) of the BBA. In addition, section 4505(b) of
the BBA required that the new payment methodology be phased
in over 4 years, effective for services furnished in
CY 1999, and fully effective in CY 2002. The first step
toward implementation of the statute was to adjust the PE
values for certain services for CY 1998. Section 4505(d) of
the BBA required that, in developing the resource-based PE
RVUs, the Secretary must--
● Use, to the maximum extent possible,
generally-accepted cost accounting principles that recognize
all staff, equipment, supplies, and expenses, not solely
those that can be linked to specific procedures and actual
data on equipment utilization.
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