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<strong>CMS</strong>-1403-FC<br />

indirect PE for all PFS services for that specialty by<br />

adding the product of the indirect PE/HR for the specialty,<br />

the physician time for the service, and the specialty’s<br />

utilization for the service.<br />

Step 14: Using the results of Step 12 and Step 13,<br />

calculate the specialty-specific indirect PE scaling factors<br />

as under the current methodology.<br />

Step 15: Using the results of Step 14, calculate an<br />

indirect practice cost index at the specialty level by<br />

dividing each specialty-specific indirect scaling factor by<br />

the average indirect scaling factor for the entire PFS.<br />

Step 16: Calculate the indirect practice cost index at<br />

the service level to ensure the capture of all indirect<br />

costs. Calculate a weighted average of the practice cost<br />

index values for the specialties that furnish the service.<br />

(Note: For services with TCs and PCs, we calculate the<br />

indirect practice cost index across the global components,<br />

PCs, and TCs. Under this method, the indirect practice cost<br />

index for a given service (for example, echocardiogram) does<br />

not vary by the PC, TC and global component.)<br />

Step 17: Apply the service level indirect practice<br />

cost index calculated in Step 16 to the service level<br />

adjusted indirect allocators calculated in Step 11 to get<br />

the indirect PE RVU.<br />

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