Published 1/1/2018
Matthew Twetten, MA, MHCDS; R. Dale Blasier, MD, MBA; Dena McDonough, PA-C, MHCDS

It's Time to Take a Second Look at the RUC

Shift in approach by CMS raises concerns
Almost since its inception, the American Medical Association’s (AMA) Multispecialty Relative-Value Update Committee (RUC) has had its critics. Recently, groups representing primary care physicians and other special interests have reemerged to voice concerns about the disproportionate influence of specialty societies on RUC decision making.

This renewed fervor prompted the online news site Axios to join the fray, with an article claiming “Uproar builds over secret doctor panel that influences Medicare.”

The RUC, a 31-person advisory body consisting entirely of practicing physicians, assigns specific values to physician services. This information is then presented to the U.S. Centers for Medicare & Medicaid Services (CMS) for use in determining payment rates. The Axios article highlighted concerns about CMS’s deference to physicians in self-valuation and payment rate setting, as well as the fact that 21 of the 31 RUC members are appointed by major national medical specialty societies.

CMS generally accepts nearly 70 percent of the RUC-recommended values. However, the first Medicare Physician Fee Schedule (MPFS) released under the Trump administration accepted virtually all the RUC recommendations. According to MedPAC, the Medicare Payment Advisory Commission, CMS justified its action “because the RUC generally considers CMS’ concerns with regards to valuing work relative value units (RVUs) and because the majority of practitioners prefer that CMS rely more heavily on the RUC when setting payment rates.”

In fact, the process of valuing the thousands of musculoskeletal procedure codes—as well as the thousands of codes used by general practitioners and other specialties—does provide a fair and rigorous review, which is both consistent across all specialties and driven by physician input. It may be a tedious process, and it may not always result in recommendations that satisfy everyone, but it does result in equal treatment across all medical specialty societies.

The AAOS believes strongly that those in practice are better able to judge the resources required to perform particular physician services than economists or policy makers.

History of the RUC
The 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 specific payment rates for specific physician procedures.

The RBRVS replaced the previous usual-and-customary system for pricing physician services and was designed to be based on the actual amount of resources necessary 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 liability as a third component.

The RUC, working with researchers from Harvard University, established the first RBRVS for the 1992 MPFS. Since then, the RUC has had two purposes: to relatively value new procedures added to the MPFS and to regularly review RVUs for established procedures. It is the RUC’s second function that has attracted the most attention and criticism.

An inherent conflict?
According to some critics, RUC members and those who present before the RUC have inherent conflicts of interests that should preclude them from valuing procedures. The contention is that presenters and deliberators who themselves perform these procedures will be biased to maximize the value of a given procedure.

This assumes, however, that no mechanism to enforce rational valuation of services exists when, in fact, the RUC and CMS do provide a powerful and incontrovertible enforcement mechanism. A two-thirds vote is required to pass any recommendation, and no single specialty has that much representation on the RUC panel. Therefore, no single specialty can unilaterally maximize RVUs for its own procedures.

Importantly, recommendations made to the RUC must be based on survey data. The survey data represent a range of possible recommendations, and the RUC has never presented a RVU recommendation that ignores provider surveys and substitutes the whim of a specialty society. Furthermore, no member of the RUC panel may comment on procedures performed by his or her own specialty. Finally, because the RBRVS is ultimately a relative value scale, any increases or decreases to one procedure produce the same effect on other procedures.

The RUC is only an advisory body to CMS. CMS is the ultimate arbiter of the relative values that are published annually in the MPFS and that, ultimately, form the basis for reimbursement rates from Medicare and many other nonfederal government payers.

AAOS participation
The AAOS will continue to participate fully in the RUC process and to support the RUC in its efforts to bring fairness and balance to the MPFS. The AAOS opposes efforts by Congress and others to substitute the judgment of nonphysicians in determining the appropriate relative value of physician services. Furthermore, the AAOS believes that the RUC will continue to play an important role in providing input to CMS on proper RVUs, even if the Medicare fee-for-service payment model is replaced or integrated into episode-based payments.

Physicians continue to volunteer significant time and resources to provide granularity and transparency to an industry that is rife with cost opacity. Rather than eliciting distrust, one would hope the RUC could serve as a model to other Medicare payment recipients (such as hospitals, pharmaceutical makers, and device manufacturers) for incentivizing similar rigor and industry self-regulation.

Matthew Twetten, MA, MHCDS, is a health policy consultant who works with the AAOS Coding, Coverage and Reimbursement Committee on coding and payment related issues.

R. Dale Blasier, MD, MBA, is the AAOS representative on the RUC Advisory Committee.

Dena McDonough, PA-C, MHCDS, is a payment policy manager in the AAOS office of government relations. She can be reached at mcdonough@aaos.org.

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