RUC analysis attempts to shift debate

A new analysis released in the May issue of Health Affairs attempts to change the direction of the contentious debate around a perceived bias by the committee that advises the Centers for Medicare & Medicaid Services on the relative value of physician services.

"It's a very contentious issue and I therefore want to try to bring some data and evidence to bear on it and get past some of the rhetoric and really sort of look at the numbers behind it," said Miriam Laugesen, assistant professor of health policy and management in the Mailman School of Public Health at Columbia University and lead researcher of the analysis. "This is a first step at quantifying what's going on."

The American Medical Association/Specialty Society Relative Value Scale Update Committee, commonly referred to as the RUC, the committee that advises CMS on the value of physician services, has been criticized for years by primary care providers and others for favoring specialty services over primary care. Since the RUC's advice to CMS shapes the Medicare payment rates for physicians, critics of the RUC have argued that the committee's bias toward specialties has created a payment divide in which specialists are paid far more than primary care providers for their work.

[See also: AAFP stays in the RUC; AAFP seeks changes from the RUC; RUC adds two new members.]

The analysis done by Laugesen and her colleagues does not address the income gap between primary care providers and specialists but does begin to shed light on the intricacies of the process.

Laugesen and her colleagues examined the RUC's recommendations and CMS decisions on work values from annual updates to the Medicare fee schedule between 1994 and 2010. The researchers analyzed 2,768 cases for which there was a RUC and a CMS work value and measured the difference between the RUC recommendations and CMS' decision.

The researchers found that CMS agreed with the RUC's recommendations 87.4 percent of the time.

The RUC generally proposed higher work values than CMS did, with the differences between the two groups being greatest for surgical services and smallest for pathology and laboratory services.

In comparison to the reference category – evaluation and management services – CMS was more likely to reduce the recommended values for surgical, radiology and medical specialty services.

Supporters and critics of the process will both be able to find evidence supporting their positions within the analysis, the researchers said, but the high level of agreement between CMS and the RUC is troubling enough that it should refocus conversations from the emotionally-charged payment divide to the need for additional advice from other sources.

"Most of the attention has been focused on the specialty societies and the RUC itself," Laugesen said. "This paper is kind of an attempt to sort of say, well, we should also think about CMS in this equation."

The RUC is just one source of information for CMS, pointed out Robert A. Berenson, MD, a fellow at the Urban Institute, a think tank based in Washington, D.C. CMS could solicit advice on work values from medical directors at health insurance companies, hospitals and group practices, he noted, to counter-balance the RUC's recommendations. Or the agency could seek out objective time data, a solution that has been recommended by the Medicare Payment Advisory Commission (MedPAC), an agency that advises Congress on issues impacting Medicare.

"How Medicare allocates more than the $60 billion which is paid out under the fee schedule should not rely on best guesses by the RUC, ratified by CMS, but rather should be based on objective information that could be available to CMS, although not without significant effort and additional administrative resources," said Berenson, who is vice-chair of MedPAC. "CMS partly relies on the free services of the RUC and specialty societies because it lacks the resources to go get the actual time data."

The researchers suggested that long-term investments be made to allow CMS the ability to research and collect work value data from more objective sources rather than relying solely on the work value recommendations of a committee made up of physicians. Without changes to the current process, the researchers concluded, CMS will likely continue to rely heavily on the RUC's recommendations.