This repo provides the necessary code and data to estimate price changes for physician fees generated by the 2010 physician fee schedule (PFS) update. Dranove and Ody (2019) discuss the nature of the price change in detail, along with a set of Stata do files, data, and some documentation. This repo is largely a replication of their efforts but limited only to estimated price changes for a given procedure. To form a physician-level measure of the magnitude of the update, you will need some measure of quantity per physician. See Dranove and Ody (2019) for some ideas on how to do this without claims data. Below, I include a brief section on the Discussion of price changes
Each of the relevant data sources are available individually and discussed in more detail below. Just scroll down to the Raw Data Sources. All of these files can also be called as part of a master file, _FinalData.R. I name these files so that they appear (by default) in Windows folders in a way that makes sense to me. So the master file begins with an underscore, and the individual files are numbered. This is just personal preference but helps me to keep things in order.
All of the raw data are publicly available; however, I have been unable to find the identical datasets from CMS that match to Dranove and Ody (2019). In the case of BETOS crosswalks, CMS no longer provides these data online at all. Nonetheless, links (where available) to all datasets are provided below. Otherwise the data are available from Dranove and Ody (2019) Supplemental Materials.
- Ambulatory Payment Classifications (APC): These are the fees paid by CMS to outpatient facilities as part of the Outpatient Prospective Payment System. Each APC consists of a group of similar services, which are themselves identified by groups of HCPCS codes. I have only found data for the top 30 APCs available online, CMS APC data; however, Dranove and Ody (2019) provide these data from 2011 to 2014 as part of their supplemental appendix. They provide the data in a different format than what is currently available from CMS.
R code to read and clean the APC data from Dranove and Ody (2019) is avalable here.
- Physician Fee Schedule (PFS): These are the fees paid by CMS to physicians. These data are available from CMS here. Dranove and Ody (2019) also provide these data in a similar format as part of their supplemental materials. Note that the CMS files are not really organized in an easy-to-use way. When downloading from CMS, I've used the "D" versions of each file in the prior year. For example, the 2012D file reflects updates as of October 2012. I take this as the relevant data for 2013. I do this because the federal fiscal year for 2013 begins in October of 2012. This also appears to match the files from Dranove and Ody (2019).
R code to read and clean the PFS data from Dranove and Ody (2019) is available here.
- BETOS Data. BETOS stands for the Berenson-Eggers Type of Service and is a higher-level categorization of services than HCPCS codes. Dranove and Ody (2019) use these to crosswalk with HCPCS codes, ultimately to identify services that are substitutable between office and facility settings. CMS does not appear to host these crosswalk files online anymore; however, they are available as part of a separate GitHub Repository here. The data are also provided as part of the supplemental material for Dranove and Ody (2019).
R code to read and clean the BETOS data from Dranove and Ody (2019) is available here.
CMS pays physicians an administratively set fee based on the Relative Value Units (RVUs) of each service. There are three seperate RVUs for any given procedure or service:
- Work RVU: An estimate of the cost of the physician's work for each service.
- Malpractice RVU: An estimate of the malpractice costs for each service.
- Practice Expense RVU: An estimate of the practice expenses for each service, which may differ depending on the location of the service (physician's office versus outpatient facility). This practice expense RVU is further split into two categories (direct and indirect expenses), where the indirect expenses are calculated as some percentage of direct expenses. CMS then takes the sum of these three RVUs and multiplies by an RVU-to-dollar conversion factor in order to find the final dollar figure for each service.
Prior to 2010, CMS relied in-part on the American Medical Association's (AMA's) Socioeconomic Monitoring System survey to calculate the indirect/direct cost ratios in the practice expense RVUs. This information slowly became outdated, and in 2007-2008, CMS deployed a new survey to update their indirect/direct cost esimates. This new survey was the Physician Practice Information Survey (PPIS). As highlighted in Dranove and Ody (2019), this new survey acts as a shock to the payment differential between services provided in an office versus facility setting. Acquiring some physician practices, and thus exploiting the payment differentials between office and facility settings, now become more or less attractive to hospitals due to the new survey.
CMS introduced the new information from FY 2010 through FY 2013. In the Physician Fee Schedule data, the incorporation of the new survey is reflected in the "trans" (i.e., "transitional") versus "full" RVUs. The transitional RVUs are the actual values used in any given year, while the full RVUs reflect the final RVUs that will be in place once the update is fully incorporated.
In order to focus exclusively on variation in payments due to the PPIS, I calculate price changes using a percentage of the full price effect. Specifically, I first calculate the full change based on the difference between the "full" price and the baseline 2009 price. I then take a the share of that difference in each year to mirror CMS's rollout of the changes. For example, the update in 2010 reflects 1/4th of the full price differential, the update in 2011 reflects 1/2 of the full differential, the udpate in 2012 reflects 3/4ths of the full differential, and by 2013 the PPIS is fully incorporated. This process mirrors that of Dranove and Ody (2019).