MedPAC Members Characterize RBRVS System as Subjective, Deeply Flawed

The process used to determine the relative value of physician services for the Medicare program is deeply flawed and driven by the interests of subspecialty societies, according to some members of the Medicare Payment Advisory Commission, or MedPAC, which met here last month.

CMS relies on the resource-based relative value scale, or RBRVS, to help set physician payment rates in the Medicare program. The RBRVS determines the relative value of physician services according to the physician work, practice expense and professional liability insurance resources required to provide those services. These factors, in turn, are translated into relative value units, or RVUs, which are used to determine final payment amounts.

"We have a system that basically tries to estimate the input costs of trying to produce a service, the work and the practice expense," said MedPAC Chair Glenn Hackbarth, J.D., during discussion about the issue at the MedPAC meeting. "The right price is based on how those inputs vary. It does not consider the value to the patient or the value to society or the shortage of various types of providers. It is strictly focused on input costs."

MedPAC is looking at payment issues to determine whether RVUs are accurate and equitable because CMS is preparing to issue a proposed rule on all physician codes that may not be valued correctly. The agency then will request public comments on the proposal.

The agency is required by law to review all RVUs in the Medicare physician fee schedule at least every five years. In the past, MedPAC members have expressed concern that inaccurate pricing of services can influence physician behavior and practice patterns.

Tom Dean, M.D., of Wessington, S.D., the only family physician on MedPAC, described the current payment system as fundamentally flawed. "There is nothing in the system that says whether a procedure should have been done in the first place, regardless of whether it was well done or not," said Dean.

"Payment accuracy also has implications for volume growth," said Kevin Hayes, Ph.D., a MedPAC analyst. Hayes, who provided an overview of pricing services in the physician fee schedule, added that under the current payment system, the volume of physician services is continuing to grow.

When determining work RVUs, CMS calculates a time estimate for each physician service based, in large part, on recommendations made by the AMA/Specialty Society Relative Value Scale Update Committee, or RUC. However, data from other sources have raised questions about the time estimates furnished by the RUC.

For example, said Hayes, the RUC says a colonoscopy should take 30 minutes of physician time. But "published research on the use of screening colonoscopy includes a much shorter time -- 13.5 minutes."

Robert Berenson, M.D., an internist and one of the newest members of MedPAC, said it should be the commission's top priority to "start moving away from frankly self-interested estimates by (sub)specialty societies to objective data."

In the meantime, CMS has proposed increasing Medicare payments for primary care physicians by 8 percent in 2010 via key changes to the Medicare physician fee schedule.