GAO Levels Sharp Criticism Against Physician Fee Committee

RUC Needs More Primary Care Input, Greater Transparency, Says Report

June 03, 2015 03:12 pm Michael Laff

An institution with heavy influence over how much physicians are paid has been sharply criticized by a federal agency that echoes AAFP calls for more transparency and a greater voice for primary care physicians.

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For more than two decades, the AMA/Specialty Society Relative Value Scale Update Committee (RUC) has made influential recommendations that help determine how much physicians should be paid for particular medical services. A new report by the Government Accountability Office (GAO) highlights longstanding criticisms about its operations -- most notably, its inconsistency, lack of transparency and the high value it places on procedures.

Many of the criticisms leveled against the RUC were voiced in the past, but the May 21 GAO report documents them in greater detail.

The report, Medicare Physician Payment Rates: Better Data and Greater Transparency Could Improve Accuracy,(gao.gov) makes clear that recommendations made by the RUC affect more than just what physicians are paid under the Medicare physician fee schedule, since that fee schedule influences what private insurers pay for services. And what Medicare and other payers pay, in turn, influences the shape of the future physician workforce.

Story highlights
  • The Government Accountability Office issued a report that highlights AAFP calls for more transparency and a greater voice for primary care physicians on the AMA/Specialty Society Relative Value Scale Update Committee (RUC).
  • By relying as heavily as it does on the RUC's recommendations, CMS lacks sufficient documentation and data to accurately measure the value of a particular physician service, the report says.
  • One longstanding complaint among family physicians and other nonprocedural specialists is the lack of transparency regarding which services are undervalued and should be considered for revaluation.

The AMA created the RUC, which is composed of various physician specialties, in 1991. It meets three times each year to review physician services and make recommendations about their value to CMS, which often uses the information to determine how much Medicare will pay for a particular service.

The GAO report's main criticism is that by relying as heavily as it does on the RUC's recommendations, CMS lacks sufficient documentation and data to accurately measure the value of a particular physician service.

"According to CMS officials, the agency does not have its own data sources to validate RUC recommendations because such data sources do not exist, so officials generally rely on the RUC's recommendations as their primary data source for work relative value," the report states.

The end result, according to the report, could be a wholesale skewing of the physician workforce. "If categories of services are systematically overvalued, the accompanying financial incentives could affect individuals' decisions to become trained in certain specialties. Thus, it is important for CMS to establish accurate Medicare payment rates for physicians' services to promote prudent spending of taxpayers' and beneficiaries' money and to promote a workforce that provides appropriate care for patients."

Another longstanding complaint among family physicians and other non-procedural specialists is the lack of transparency regarding which services are undervalued and should be considered for revaluation. In one example, GAO auditors asked CMS officials to document how it made recommendations for two particular services. CMS officials said they had no such documentation.

"Without such documentation, there is no assurance that CMS followed a standardized process to ensure consistent reviews and accurate relative values," the report states.

Another problem the GAO report identifies is that the RUC's membership does not reflect the larger physician population. The RUC is composed of 31 members, including its chairman. There is one permanent seat for family medicine, whose occupant is appointed by the AAFP, and one rotating seat for primary care.

"With respect to the RUC's representativeness, stakeholders such as the American Academy of Family Physicians have expressed concerns that primary care physicians are underrepresented on the RUC, which biases the RUC's recommendations against primary care services," the report states.

Other nonpartisan institutions such as the Medicare Payment Advisory Commission (MedPAC) have also been critical of the RUC on grounds that its recommendations rely on insufficient evidence. They also say CMS is not focused enough on physician services that comprise the largest percentage of Medicare's budget.

MedPAC board members have said that CMS should develop internal resources to recommend relative value measurements.

"Our criticism is not with the people who are involved with the RUC," said Kent Moore, AAFP senior strategist for physician payment. "It's about the structure, the process and the data that they rely upon."

For example, Moore said, "Instead of relying solely upon a physician's perception of time for a procedure, we'd like to see the RUC and CMS use other data, such as surgical logs, to validate what the RUC and CMS are assuming," Moore said. "That would provide more confidence that the time being used was, in fact, an accurate measure of how long it takes to perform a colonoscopy or a hip replacement."

The last time the RUC reviewed evaluation and management codes was in 2005 -- 10 years after the previous review, said Moore. (CMS does not maintain a database tracking when services were last reviewed.) The GAO report notes that CMS has an open period during which the public can ask for review of particular codes, but Moore said the AAFP is hesitant to submit specific codes for review as long as the current structure and process remain in place.

"The RUC has a role to play," he said, noting some rates in the fee schedule for primary care have increased. "However, there is room for improvement, because the process often favors procedures rather than the kinds of work that primary care physicians typically do."

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