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CMS-1403-FC productivity growth in physicians' offices by the 10-year moving average of productivity in the private nonfarm business sector. Table 32 presents a listing of the MEI cost categories with associated weights and percent changes for price proxies for the 2009 update. For CY 2009, the increase in the MEI is 1.6 percent, which includes a 1.4 percent productivity offset based on the 10-year moving average of multifactor productivity. This is the result of a 3.6 percent increase in physician’s own time and a 2.4 percent increase in physician’s PE. Within the physician’s PE, the largest increase occurred in prescription drugs, which increased 6.0 percent, and employee benefits, which increased 4.3 percent. 946
CMS-1403-FC TABLE 32: Increase in the Medicare Economic Index Update for CY 2009 1 CY 2000 Cost Categories and Price Measures Weights 2 CY 2009 Percent Changes Medicare Economic Index Total, productivity adjusted 3 N/A 1.6 Productivity: 10-year moving average of multifactor productivity, private nonfarm business sector 3 N/A 1.4 Medicare Economic Index Total, without productivity adjustment 100.000 3.0 1. Physician's Own Time 4 52.466 3.6 a. Wages and Salaries: Average Hourly Earnings, private Nonfarm 42.730 3.8 b. Fringe Benefits: Employment Cost Index, benefits, private Nonfarm 4 9.735 2.7 2. Physician's Practice Expense 4 47.534 2.4 a. Nonphysician Employee Compensation 18.653 3.6 (1) Wages and Salaries: Employment Cost Index, wages and salaries, weighted by occupation 13.808 3.4 (2) Fringe Benefits: Employment Cost Index, fringe benefits, weighted by occupation 4.845 4.3 b. Office Expense: Consumer Price Index for Urban Areas (CPI-U), housing 12.209 3.1 c. Drugs and Medical Materials and Supplies (1) Medical Materials and Supplies: Producer Price Index (PPI), surgical appliances and 4.319 4.1 supplies/CPI-U, medical equipment and supplies (equally weighted) 2.011 1.4 (2) Pharmaceuticals: Producer Price Index (PPI ethical prescription drugs) d. Professional Liability Insurance: 2.308 6.0 Professional liability insurance Premiums 5 3.865 -2.7 e. Medical Equipment: PPI, medical instruments and equipment 2.055 0.5 f. Other Expenses 6.433 2.3 1. The rates of historical change are estimated for the 12-month period ending June 30, 2008, which is the period used for computing the CY 2009 update. The price proxy values are based upon the latest available Bureau of Labor Statistics data as of September 5, 2008. 2. The weights shown for the MEI components are the 2000 base-year weights, which may not sum to subtotals or totals because of rounding. The MEI is a fixed-weight, Laspeyres-type input price index whose category weights indicate the distribution of expenditures among the inputs to physicians' services for CY 2000. To determine the MEI level for a given year, the price proxy level for each component is multiplied by its 2000 weight. The sum of these products (weights multiplied by the price index levels) over all cost categories yields the composite MEI level for a given year. The annual percent change in the MEI levels is an estimate of price change over time for a fixed market basket of inputs to physicians' services. 3. These numbers may not sum due to rounding and the multiplicative nature of their relationship. 947
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- Page 913 and 914: CMS-1403-FC Therefore, we disagree
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- Page 977 and 978: CMS-1403-FC the CF. Therefore, this
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- Page 989 and 990: CMS-1403-FC Our interpretation of t
- Page 991 and 992: CMS-1403-FC Response: We understand
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<strong>CMS</strong>-1403-FC<br />
productivity growth in physicians' offices by the 10-year<br />
moving average of productivity in the private nonfarm<br />
business sector.<br />
Table 32 presents a listing of the MEI cost categories<br />
with associated weights and percent changes for price<br />
proxies for the 2009 update. For CY 2009, the increase in<br />
the MEI is 1.6 percent, which includes a 1.4 percent<br />
productivity offset based on the 10-year moving average of<br />
multifactor productivity. <strong>This</strong> is the result of a<br />
3.6 percent increase in physician’s own time and a<br />
2.4 percent increase in physician’s PE. Within the<br />
physician’s PE, the largest increase occurred in<br />
prescription drugs, which increased 6.0 percent, and<br />
employee benefits, which increased 4.3 percent.<br />
946