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Texas Department of Insurance
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Commissioner’s Bulletin # B-0006-06

March 6, 2006

To:   All Workers' Compensation System Participants

Re:   Change in Medicare Conversion Factor for Calendar Year 2006

Due to recent changes related to the Medicare conversion factor used by Centers for Medicare & Medicaid Services (CMS), insurance carriers must immediately review their processing systems to ensure that professional medical services are correctly reimbursed for dates of service on or after January 1, 2006. The Medical Fee Guideline, Rule 134.202, uses the CMS conversion factor along with a Relative Value Unit (RVU), a Geographic Practice Cost Index (GPCI), and a Texas Department of Insurance, Division of Workers Compensation (DWC) Multiplier (125% or 1.25) to calculate reimbursement for professional medical services in the Texas workers' compensation system. By quickly adjusting to this recent change, insurance carriers will avoid additional administrative processing costs for both insurance carriers and health care providers by issuing the correct reimbursement amount in processing pending claims.


In addition, insurance carriers are requested to pay the health care provider the difference between the newly calculated Maximum Allowable Reimbursement (MAR), as appropriate based on the amount billed, without requiring the health care provider to submit a reconsideration request for dates of service on or after January 1, 2006. If the carrier paid the entire amount billed by the health care provider, no additional reimbursement is due to the health care provider.


These changes are the result of President Bush's approval of the Deficit Reduction Act, S. 1932, on February 8, 2006, which returns the Medicare conversion factor for calendar year (CY) 2006 back to the CY 2005 conversion factor of $37.8975. While the CY 2006 conversion factor returned to the CY 2005 level, changes in RVUs and GPCIs for CY 2006 remain in effect. The impact of the return to the CY 2005 conversion factor, but with new RVUs and GPCIs causes minor differences in the (MAR) for certain CPT Codes. The multiplier used by the DWC remains as 1.25. The following chart illustrates the fluctuation in reimbursement rates caused by the changes to the conversion factor, RVUs, and GPCIs:




Impact of Changes in Reimbursement for CPT Code 99213 in Brazoria County, Texas


MAR for CY 2005 with conversion factor of $37.8975

MAR for CY 2006 PRIOR to this change in conversion factor set at $36.1770

MAR for CY 2006 as a result of this change in the conversion factor restored to the CY 2005 level of $37.8975





The CY 2005 conversion factor of $37.8975 is to be used effective immediately when calculating MAR for services provided on or after January 1, 2006.

For questions regarding this bulletin, please contact Allen McDonald, Acting Deputy Commissioner for Workplace and Medical Services at: 512-804-4803.


_[original signed by Albert Betts]___

Albert Betts

Commissioner of Workers' Compensation


Last updated: 2/1/2018