The Relative Value Update Committee: The Process for Valuing Anesthesia, Pain Medicine and Other Services

The Centers for Medicare and Medicaid Services (CMS) does not conjure up the relative value units (RVUs) on which payment for individual procedures is based, although it may sometimes seem that way.  A consensus group of physicians representing all the major specialties, convened by the American Medical Association (AMA), meets three times a year to develop recommendations for RVU adjustments. The recommendations from the consensus group (the Relative Value Scale Update Committee, or RUC) are sent on to CMS, which considers the information as it prepares its annual update to the Physician Fee Schedule. In recent years, CMS has adopted between 87.4 and 95 percent of the RUC’s recommendations, depending on which source you accept, Health Affairs or the RUC, respectively.  The former figure represents 2,419 out of 2,768 recommendations that the RUC proposed between 1994 and 2010.

Composition of the RUC

The RUC consists of 31 members, 28 of whom are eligible to vote.  In addition to representatives of each of 21 major specialties, the members include the RUC Chair, the Co-Chair of the RUC Health Care Professionals Advisory Committee Review Board, and representatives of the AMA, the American Osteopathic Association, the CPT Editorial Panel and the Chair of the Practice Expense Review Committee.  The remaining four seats rotate on a two-year basis, with two reserved for an internal medicine subspecialty, one for a primary care representative, and one for any other specialty.

In addition to the voting members, there is an advisory committee in which the 109 specialties and subspecialties seated in the AMA House of Delegates participate.

The American Society of Anesthesiologists is among the specialties with permanent representation.  Stanley Stead, MD, currently serves as ASA’s representative.  Pain Medicine does not have its own seat since it is not a distinct American Board of Medical Specialties discipline.  Nurse anesthetists and other non-physician health care professionals share an advisory committee and one voting seat.  They also participate on RUC subcommittees.

Process

When the CPT Editorial Panel approves a new code, the next step is for the procedure or service to be presented to the RUC for determination of “work” and practice expense relative values.  Every five years, the RUC also undertakes to review potentially misvalued services through its Relativity Assessment Workgroup. 

The interested specialty or specialties will conduct a survey of providers who have experience with the newly-defined clinical service and can provide an assessment of the relative value of the physician work involved.  The survey instrument is based on specific RUC-approved definitions and instructions.  If the requisite number of surveys is completed, the specialty prepares RVU recommendations that it presents to and defends before the entire RUC.  If two-thirds of the RUC members approve the recommended values, these are transmitted to CMS for consideration and adoption.

Among the issues that the RUC will debate with respect to each service proposed for valuation are: total physician time involved in providing the service; clinical staff time; medical supplies (type and number of units); medical equipment utilized; comparable key reference services and expected utilization data.

The amount of work that goes into developing the RVU recommendations is huge.  The AMA estimates that the volunteer physician advisors spend up to 15 days in meetings and travel and six to eight days in preparation and review each year.  The AMA also estimates that the annual cost to the medical societies and health care professional organizations in $7 million in staff salaries, foregone physician compensation, travel costs and survey expense.

Criticism of the RUC

The RUC has engendered controversy and criticism since its creation in the early 1990s.  This seems inevitable given that the RUC is comprised almost entirely of physicians, the very people who have the most to win or lose based on how Medicare values the work they perform.  CMS’ reliance on a physician organization with an obvious conflict of interest has been criticized by bodies like the Government Accountability Office and MedPAC, the independent agency that advises Congress on Medicare payment policy.

The American Academy of Family Physicians (AAFP), which has a seat on the RUC, has long been a vocal critic, claiming that the RUC has consistently undervalued evaluation and management services while overvaluing surgery and procedures.  According to the AAFP,

The RUC's deliberations are complicated by the fact that the size of the Medicare payment pie is fixed; a bigger slice for primary care means a smaller slice for surgery, and vice versa. The following quote from Tom Scully, former administrator of CMS, captures the essence of the process: “Essentially, we sit down with [RUC] every year and say, ‘Here's $43 billion and growing, how do you want to [divide it]? What's the relative value of weights between anesthesiologists, gastroenterologists, surgeons?’ and set the relative values at what the physician community thinks the relative payment should be.”
Not all specialty societies would agree that the RUC process favors procedures.  The ASA, for example, expended great effort and considerable funds persuading the RUC to recommend an increase in the valuation of anesthesia “work” during the 1990s and early 2000s—and yet the “33 percent problem” (Medicare pays only 33 percent of commercial rates for anesthesia services, in contrast to 80 percent for almost all other services paid under the Physician Fee Schedule) survives to this day.

In July of this year, the Washington Post claimed “that Medicare pays for physician services—a $69.6 billion item in 2012—according to an arcane and little-known price list, over which doctors themselves exercise considerable and less-than-totally-transparent influence.”  The Post’s editors believe that there should be full public access to Medicare’s physician payment database; that the RUC’s methodology, which is based on opinion rather than objective measurements of time and other resources, is flawed; and fundamentally, that relative-value pricing is inconsistent with the current meaning of “value” in health care, since “it reflects physician inputs—not patient outcomes.”

Changes Underway at the RUC

Last month the RUC announced a number of important changes to address the criticisms and challenges it has faced.  It will begin to publish minutes of its meetings, including the overall votes on RVU recommendations (but not the votes of individual members).  The RUC will also publish its meeting dates and locations “with greater visibility” and refine its survey methodology, which typically requires only 30 responses.  Going forward, for services performed more than 100,000 times a year, at least 50 surveys will now be required.  For services performed one million times, at least 75 surveys will need to be completed.  Conducting the surveys will involve a more centralized process; the specialty societies will no longer run the surveys independently.

The next meeting of the RUC will take place at the end of January, 2014 in Phoenix.  We hope that the changes will mitigate the criticism and we salute the volunteer physicians who will participate for their dedication and their service.