AMA’s RUC Is Critical to Physician Reimbursement

AAOS is a longstanding member of the 31-person advisory board

As one of 21 medical specialty societies with a permanent seat, AAOS has been a part of the American Medical Association (AMA) multispecialty Relative-value Update Committee (RUC) since its inception in 1991. Although the RUC, a 31-person advisory body, has been described as “little known” and “hardly ever heard of,” it plays a critical role in the maintenance and development of physician reimbursement.

AAOS has actively participated in the valuation of thousands of musculoskeletal procedure codes through the RUC survey and valuation process and typically presents 25 to 100 musculoskeletal codes annually for review or revaluation.

Although the process can be tedious and the Centers for Medicare & Medicaid Services (CMS) does not always accept the RUC’s recommendations, the process provides a fair review that is consistent across all specialties. The process is driven by physician input, an essential component in judging the resources required to perform the services under review. The process is also very time- and labor-intensive and requires regular surveys of members who perform specific services, whether total joint surgery, spine surgery, foot and ankle surgery, trauma surgery, or other musculoskeletal care.

The RUC’s role as an advisory body to CMS is frequently overlooked and underappreciated. CMS is the ultimate arbiter of the relative values published annually in the Medicare Physician Fee Schedule (PFS). The relative values form the basis for reimbursement from Medicare and many other nonfederal government payers.

History of the RUC

AMA established the RUC in response to a request from the Health Care Finance Administration (HCFA), the predecessor to CMS. HCFA wanted assistance in establishing a Resource-based Relative Value Scale (RBRVS), which would be used to determine payment rates for specific physician procedures.

The RBRVS, which replaced the previous usual and customary system for pricing physician services, was designed to be based on the actual amount of resources needed to provide a particular physician service. At the time, the two resources studied for each service were physician work and physician practice expense. CMS later added medical malpractice as a third component.

Working with researchers from Harvard University, the RUC established the first RBRVS for the 1992 Medicare PFS. Since then, the committee has had two purposes: to relatively value new procedures added to the PFS and to regularly review relative value units (RVUs) for established procedures. The latter function has attracted the most attention and increasingly consumes a larger share of the RUC’s activities.

RUC survey and valuation process

For the past 24 years, the RUC has used essentially the same process for reviewing and valuing work and practice expense RVUs. The longitudinal consistency is one of the key features of the relative value system and allows the continual comparison of physician services, not only across specialties but also over time, as the underlying process and data analysis are consistent.

When a service or procedure is being reviewed—either because it has been added to the Current Procedural Terminology (CPT) professional set of Category I codes or because it has been identified for an updated review—specialty societies are expected to conduct surveys of members who have direct knowledge and experience with the service(s).

Specialty societies, such as AAOS, send links to random samples of their memberships and ask respondents to complete a series of approximately a dozen questions related to the resources used by a physician providing the service. Respondents are presented with the CPT code descriptor; a two- to three-sentence description of the typical patient; and a set of 15–20 “key reference services,” which are similar procedures from which respondents select the most similar service for the purposes of assessing the relative resources required to provide the service under review.

From there, survey respondents are asked to estimate the typical time they spend providing three separate components of the service: pre-, intra-, and post-service time. Preservice time includes face-to-face time the physician typically spends with a patient prior to the intraservice or skin-to-skin operating time, as well as the time required to position a patient for service, spend in scrub, dress, and wait. The intraservice time is the time spent skin-to-skin or from the time of incision to closing or finishing a surgical procedure. The post-service time consists of the time spent immediately after completion of a procedure, in the operating room, dictating notes and records, and all face-to-face visits with a patient in the hospital and office within the designated global period (typically 90 days postoperatively but possibly zero or 10).

Survey respondents also are asked to assess the relative complexity involved in providing the service by ranking its intensity to the key reference service identified by the survey respondent. The survey respondent then is asked to provide an estimate of the number of times he or she has provided the service in the past 12 months, as well as his or her best RVU estimate.

Survey responses are collected by the specialty society, analyzed, and reviewed by society RUC advisors, who then present recommended values to the full RUC at one of the three yearly meetings. At that time, RUC votes to accept or amend the recommended values. The committee also reviews the practice expense and malpractice inputs for each procedure under review. A separate RUC subcommittee reviews practice expense values, which are designed to capture the direct and indirect nonphysician time and inputs (e.g., labor costs for nonphysician personnel, office overhead, costs of supplies and equipment) associated with the care provided by the surgeon. The inputs are based on expert review by society RUC advisors and presented at an RUC’s Practice Expense Subcommittee meeting. Malpractice RVUs are based on the mix of providers of the service(s) reviewed (e.g., orthopaedic surgeons, neurosurgeons) and their associated malpractice costs, calculated through a formula that crosswalks the service(s) under review to service(s) with similar provider mixes. The formulas are maintained by the RUC’s Malpractice Subcommittee.

The RUC-recommended relative values then are provided to CMS for inclusion in the annual Medicare PFS. The actual payment for a procedure depends on the work, practice expense, and malpractice RVUs assigned times a multiplier, which is determined by CMS (or another private payer) each year.

Why participation is critical

The RUC process ultimately relies on the engagement of practicing physicians in the survey. Without robust responses to survey requests, societies cannot compile statistically reliable data. Without data, they cannot forward reliable and consistent recommendations to the RUC and CMS. When a member receives a request to participate in an RUC survey, it is essential that he or she take 15–20 minutes to complete the online survey and offer informed assessments of the relative resources required to provide services.

Specialty society staff are available to assist members in completing the survey forms and to answer questions. In addition, AAOS and other orthopaedic subspecialties occasionally offer webinars or in-person training sessions for RUC surveys. We encourage members to participate in these continuing medical education courses to become more informed about the RUC survey process and the RUC and CPT systems, which serve as the basis for coding and reimbursement of orthopaedic services.

R. Dale Blasier, MD, MBA, is the AAOS RUC panel member.

Recently identified potentially misvalued codes
Matthew Twetten, MA, MHCDS

  • In its 2019 Medicare Physician Fee Schedule Final Rule, the Centers for Medicare & Medicaid Services (CMS) identified several potentially misvalued current procedural terminology codes, including 27130 (total hip arthroplasty) and 27447 (total knee arthroplasty).
  • AAOS came out strongly against the assumption and advised against a reevaluation, noting that there has not been any evidence to suggest a change in physician work or practice expense since they were last revalued in 2013.
  • AAOS continues to work with the American Association of Hip and Knee Surgeons and other stakeholders to affirm the current work and practice expense values with both the Relative Value Update Committee and CMS.
  • If AAOS has to do a new survey in the coming months, it will contact members who have direct knowledge and experience with the services and can provide assessments of the relative resources required to provide them.

Matthew Twetten, MA, MHCDS, is staff liaison to the RUC in the AAOS Office of Government Relations.

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