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The Specialty Society Relative Value Scale Update Committee or Relative Value Update Committee (RUC, pronounced "ruck") [1] is a volunteer group of 31 physicians who have made highly influential recommendations on how to value a physician's work when computing health care prices in the United States' public health insurance program Medicare. [2]
Before the 1992 implementation of the Medicare fee schedule, physician payments were made under the "usual, customary and reasonable" payment model (a "charge-based" payment system). Physician services were largely considered to be misvalued under this system, with evaluation and management services being undervalued and procedures overvalued. [3] Third-party payers (public and private health insurance) advocated an improved model to replace the UCR fees, which had been associated with stark examples of specialists making significantly higher sums of money than primary care physicians. [4]
With reference to the research of William Hsiao and colleagues, [5] the Omnibus Budget Reconciliation Act of 1989 was passed with the legislative intent of reducing the payment disparity between primary care and other specialties through use of the resource-based relative value scale (RBRVS). Beginning in 2000, all three components of the Medicare RBRVS, physician work, practice expense and malpractice expense are resource-based as required by Section 1848(c) of the Social Security Act.
RUC was established in 1991 by the American Medical Association (AMA) and medical specialist groups. [6] The AMA sponsors RUC "both as an exercise of 'its First Amendment rights to petition the Federal Government' and for 'monitoring economic trends ... related to the CPT [Current Procedures and Terminology] development process". [7]
RUC is highly influential because it de facto sets Medicare valuations of physician work relative value units (RVUs) [1] of Current Procedural Terminology (CPT) codes. [8] (The Centers for Medicare and Medicaid Services (CMS) is the de jure work RVU determining body.) On average, physician work RVUs make up slightly more than half of the value in a Medicare payment. [7] Historically, CMS has accepted RUC recommendations more than 90% of the time. [9] Health economist Uwe Reinhardt characterized the CMS as slavishly accepting RUC recommendations. [1] The physician work RVU values accepted by CMS also influence private health insurance reimbursement. [7]
In 2002, a RUC update of values raised concerns that the process, which was initiated by medical speciality groups, unfairly cut primary care physician pay. [10]
In a 2010 Archives of Internal Medicine publication written before the major health care reform legislation passed Congress—the Patient Protection and Affordable Care Act (PPACA)—Federman et al. wrote:
Physician dissatisfaction with Medicare reimbursements and concerns about equity of reimbursements suggest that the role of the RUC in advising Medicare should be carefully evaluated. The Obama administration and health policy experts have called for the creation of an independent Medicare advisory committee ... Without an independent arbiter, physicians and physician groups are likely to continue having complaints about the equitability of reimbursements under Medicare. [11]
Critics have pointed out that many RUC members may have significant conflicts of interest because of their financial relationships. [12]
In 2013 a report in the Washington Post highlighted how time seemed to bend in the system of time values assigned to various procedures. A Florida practice performing an average twelve colonoscopies and four other procedures a day in 2012 would be considered to take the physically impossible 26 hours in a nine- to 10-hour day. In other examples: In Florida and Pennsylvania surgery centers in some specialties, "more than one in five doctors would have to have been working more than 12 hours on average on a single day — much longer than the 10 hours or so a typical surgery center is open"; and "Florida records show 78 doctors — gastroenterologists, ophthalmologists, orthopedic surgeons and others — who performed at least 24 hours worth of procedures on an average workday". RUC chairperson Levy said in the report, "None of us believe the numbers are fine-tuned.... We do believe we get them right with respect to each other" while emphasizing that the "voting people around that table can be really harsh". Researcher Hsiao of the original Harvard study said the "current set of values 'seems to be distorted.... The AMA fought very hard to take over this updating process. I said this had to be done by an impartial group of people. This is highly political'". Looking at the time between 2003 and 2013, "the AMA and Medicare have increased the work values for 68 percent of the 5,700 codes analyzed by The Post, while decreasing them for only 10 percent" and while technology is argued, again with colonoscopies as an example, to be reducing actual time spent. Looked at another way, "Medicare spending on physician fees per patient grew 58 percent between 2001 and 2011, mostly because doctors increased the number of procedures performed but also because the price of those procedures rose". Finally, there was an indication in the report that the acceptance rate of the AMA's values by Medicare "has fallen in recent years from 90 percent [or higher] to about 70 percent" but the federal agency has far fewer people – "six to eight" – monitoring the process than the AMA has operating it. [13]
The RUC bears the brunt of the inherent problems with regulation and government price-setting. In a follow-up to The Washington Post report, Bloomberg notes: "There is no system of payment-setting that will not ultimately rely on information from self-interested parties, just as there is no system of financial regulation that can be designed without talking to bankers, or a system of education reform that can be put in place without asking teachers and principals how things work now." [14]
The Independent Payment Advisory Board passed in the PPACA. It could bypass RUC to cut payments to relatively highly compensated specialists, such as dermatologists. [1] [15] [16] [17] [18]
On February 9, 2018, the United States Congress voted to repeal the Independent Payment Advisory Board as a part of the Bipartisan Budget Act of 2018, [19] by a vote of 71−28 in the US Senate [20] and by a vote of 240−186 in US House of Representatives. [21] Shortly thereafter that day, President Trump signed the budget bill into law, [22] thereby repealing the IPAB. [19]
The current membership of the Relative Value Scale Update Committee (RUC) is as follows: [23] [12]
Medicare is a government national health insurance program in the United States, begun in 1965 under the Social Security Administration (SSA) and now administered by the Centers for Medicare and Medicaid Services (CMS). It primarily provides health insurance for Americans aged 65 and older, but also for some younger people with disability status as determined by the SSA, including people with end stage renal disease and amyotrophic lateral sclerosis.
Diagnosis-related group (DRG) is a system to classify hospital cases into one of originally 467 groups, with the last group being "Ungroupable". This system of classification was developed as a collaborative project by Robert B Fetter, PhD, of the Yale School of Management, and John D. Thompson, MPH, of the Yale School of Public Health. The system is also referred to as "the DRGs", and its intent was to identify the "products" that a hospital provides. One example of a "product" is an appendectomy. The system was developed in anticipation of convincing Congress to use it for reimbursement, to replace "cost based" reimbursement that had been used up to that point. DRGs are assigned by a "grouper" program based on ICD diagnoses, procedures, age, sex, discharge status, and the presence of complications or comorbidities. DRGs have been used in the US since 1982 to determine how much Medicare pays the hospital for each "product", since patients within each category are clinically similar and are expected to use the same level of hospital resources. DRGs may be further grouped into Major Diagnostic Categories (MDCs). DRGs are also standard practice for establishing reimbursements for other Medicare related reimbursements such as to home healthcare providers.
Resource-based relative value scale (RBRVS) is a schema used to determine how much money medical providers should be paid. It is partially used by Medicare in the United States and by nearly all health maintenance organizations (HMOs).
The Current Procedural Terminology (CPT) code set is a procedural code set developed by the American Medical Association (AMA). It is maintained by the CPT Editorial Panel. The CPT code set describes medical, surgical, and diagnostic services and is designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes. New editions are released each October, with CPT 2021 being in use since October 2021. It is available in both a standard edition and a professional edition.
In the healthcare industry, pay for performance (P4P), also known as "value-based purchasing", is a payment model that offers financial incentives to physicians, hospitals, medical groups, and other healthcare providers for meeting certain performance measures. Clinical outcomes, such as longer survival, are difficult to measure, so pay for performance systems usually evaluate process quality and efficiency, such as measuring blood pressure, lowering blood pressure, or counseling patients to stop smoking. This model also penalizes health care providers for poor outcomes, medical errors, or increased costs. Integrated delivery systems where insurers and providers share in the cost are intended to help align incentives for value-based care.
Health care prices in the United States of America describes market and non-market factors that determine pricing, along with possible causes as to why prices are higher than other countries. Compared to other OECD countries, U.S. healthcare costs are one-third higher or more relative to the size of the economy (GDP). According to the CDC, during 2015 health expenditures per-person were nearly $10,000 on average, with total expenditures of $3.2 trillion or 17.8% GDP. Proximate reasons for the differences with other countries include: higher prices for the same services and greater use of healthcare. Higher administrative costs, higher per-capita income, and less government intervention to drive down prices are deeper causes. While the annual inflation rate in healthcare costs has declined in recent decades; it still remains above the rate of economic growth, resulting in a steady increase in healthcare expenditures relative to GDP from 6% in 1970 to nearly 18% in 2015.
Fee-for-service (FFS) is a payment model where services are unbundled and paid for separately.
Geographic Practice Cost Index is used along with Relative Value Units by Medicare to determine allowable payment amounts for medical procedures. There are multiple GPCIs: Cost of Living, Malpractice, and Practice Cost/Expense. These categories allow Medicare to adjust reimbursement rates to take into account regional and practice-specific factors.
A rural health clinic (RHC) is a clinic located in a rural, medically under-served area in the United States that has a separate reimbursement structure from the standard medical office under the Medicare and Medicaid programs. RHCs were established by the Rural Health Clinic Services Act of 1977, . The RHC program increases access to health care in rural areas by
Usual, customary, and reasonable (UCR) is an American method of generating health care prices, described as "more or less whatever doctors decided to charge". According to Steven Schroeder, Wilbur Cohen inserted UCR into the Social Security Act of 1965 "in an unsuccessful attempt to placate the American Medical Association". Health insurers determine what they deem to be "usual, customary and reasonable" and pay only a percentage of that.
The Medicare Sustainable Growth Rate (SGR) was a method used by the Centers for Medicare and Medicaid Services (CMS) in the United States to control spending by Medicare on physician services.
Bundled payment is the reimbursement of health care providers "on the basis of expected costs for clinically-defined episodes of care." It has been described as "a middle ground" between fee-for-service reimbursement and capitation, given that risk is shared between payer and provider. Bundled payments have been proposed in the health care reform debate in the United States as a strategy for reducing health care costs, especially during the Obama administration (2009–2016). Commercial payers have shown interest in bundled payments in order to reduce costs. In 2012, it was estimated that approximately one-third of the United States healthcare reimbursement used bundled methodology.
The Independent Payment Advisory Board (IPAB) was to be a fifteen-member United States government agency created in 2010 by sections 3403 and 10320 of the Patient Protection and Affordable Care Act which was to have the explicit task of achieving specified savings in Medicare without affecting coverage or quality. Under previous and current law, changes to Medicare payment rates and program rules are recommended by MedPAC but require an act of Congress to take effect. The system creating IPAB granted IPAB the authority to make changes to the Medicare program with the Congress being given the power to overrule the agency's decisions through supermajority vote. The Bipartisan Budget Act of 2018 repealed IPAB before it could take effect.
An accountable care organization (ACO) is a healthcare organization that ties provider reimbursements to quality metrics and reductions in the cost of care. ACOs in the United States are formed from a group of coordinated health-care practitioners. They use alternative payment models, normally, capitation. The organization is accountable to patients and third-party payers for the quality, appropriateness and efficiency of the health care provided. According to the Centers for Medicare and Medicaid Services, an ACO is "an organization of health care practitioners that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it".
Relative value units (RVUs) are a measure of value used in the United States Medicare reimbursement formula for physician services. RVUs are a part of the resource-based relative value scale (RBRVS).
Peter B. Bach is a physician and writer at Memorial Sloan-Kettering Cancer Center where he is Director of the Center for Health Policy and Outcomes. His research focuses on healthcare policy, particularly as it relates to Medicare, racial disparities in cancer care quality, and lung cancer. Along with his scientific writings he is a frequent contributor to The New York Times and other newspapers.
The Physician Quality Reporting System (PQRS), formerly known as the Physician Quality Reporting Initiative (PQRI), is a health care quality improvement incentive program initiated by the Centers for Medicare and Medicaid Services (CMS) in the United States in 2006. It is an example of a "pay for performance" program which rewards providers financially for reporting healthcare quality data to CMS. PQRS ended in 2016, beginning with the 2018 payment adjustment. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) replaced this and other CMS quality programs with a new umbrella program called the Quality Payment Program (QPP), under which clinicians formerly reporting under PQRS would instead report quality data under one of two QPP program tracks: the Merit-based Incentive Payment System (MIPS) or the Advanced Alternative Payment Model (APMs) track.
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 is a bill that would replace the Sustainable Growth Rate (SGR) formula, which determines the annual updates to payment rates for physicians’ services in Medicare, with new systems for establishing those payment rates.
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Health care efficiency is a comparison of delivery system outputs, such as physician visits, relative value units, or health outcomes, with inputs like cost, time, or material. Efficiency can be reported then as a ratio of outputs to inputs or a comparison to optimal productivity using stochastic frontier analysis or data envelopment analysis. An alternative approach is to look at latency times and delay times between a care order and completion of work, and stated accomplishment in relation to estimated effort.
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