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President’s Message


S  TTmmer 2015

Tom Kintanar, MD  FWMS President

President’s Message: The Relative Value Scale Update Committee or RUC  Tom Kintanar, MD

When our medical group, Associated Family Medical Consultants, sold to the Lutheran Health Network seven years ago, we were no longer in control of our collective financial destiny.  Instead of separating all of our collective incomes within equitable framework that was agreed-upon by all of our partners, we inherited a new payment template where we would be contracted to a certain payment schedule. The schedule was based on our productivity. And as many of us know at this point, that productivity quotient was a relative value unit (RVU). These units have different values according to which specialty or subspecialty you belong. Subsequently each procedure that any specialty provides is afforded a CPT, which has a certain RVU valuation.  Quite obviously, the more services provided award the hard working colleague a higher production of RVUs. In this framework, we truly did not change our practice patterns of behavior drastically from when we were self- directed by owning our own practice. We simply continued to work hard and felt we were fairly compensated. Each CPT code has a certain value. For instance in my specialty of Family Medicine, a level 3 visit or a 99213 has an RVU of .97. A level 4 has a value of 1.5 RVUs.

When I was involved in Family Medicine politics at a national level, I learned of the RUC team. This stands for the relative value scale update committee. Family Medicine was one of 31 specialties who have the responsibility of scrutinizing and making recommendations on valuing a physician’s work when computing healthcare prices in the United States public health insurance program Medicare. This process influences what we are ultimately paid by Medicare. But we have experienced that the Medicare fee schedule also influences different third-party payers when it comes to payment for the services that medicine renders.

The Medicare fee schedule was implemented in 1992. Previous to this time, billing was made under the “usual, customary and reasonable payment model”  and a “charge based” payment system. The RUC was established in 1991 by the AMA and medical specialty groups. The RUC, sponsored by the AMA, is to exercise its “first amendment rights in petitioning the federal government“  and  to  monitor  economic  trends  related to the CPT development process. This places the RUC  as the main determinant of how Medicare values physicians work RVUs of the current CPT codes. The AMA describes this body as an expert panel, which makes recommendations to CMS on the resources required to provide a medical service. The panel’s assessment takes into account a physician’s time, supplies, and equipment involved in patient care. This body regularly reviews medical services to determine whether they are appropriate, undervalued, overvalued, and subsequently, volunteers recommendations to the CMS for the agencies consideration. CMS ultimately makes all final decisions about what payments should be for each service under the Medicare program. My description of this process so far seems very tactical.  And interestingly enough, the process that ultimately values our work is based on Survey process which tasks at least 75 physicians to complete a survey valuing a procedure that is performed more than 1 million times per year in the Medicare population. For services performed more than 100,000 times annually, 50 physicians are required to complete the survey.  The surveys then culminate in recommendations based on very detailed analytic survey questions, which are then vetted through the review process at four meetings a year.


Composition of the RUC

The RUC is comprised of 31 members and 31 alternate members. Twenty-three of the members are appointed by major national medical specialty societies. Three of  the seats rotate every two years; two are reserved for an Internal Medicine subspecialty, and the other is open to any other specialty. The three other seats are represented by members of the CPT Editorial Panel, the Healthcare Professionals Advisory Committee, and the Practice Expense Review Committee. The remaining three seats are filled by representatives of the AMA, American Osteopathic Association, and the Chair, who is appointed by the AMA.

A Medicare payment is broken down into a CPT code, and work RVUs are assigned. A work adjuster, which is a predetermined conversion number is provided.  There is a component of non-facility practice expense and malpractice RVU expense culminating in a total RVU value. This number is then again multiplied through a conversion factor to equate to a Medicare payment allowance for the services rendered for the CPT code.

The reason I am sharing all these details is that as extremely busy clinicians, we now have come to expect a certain RVU for the services that we provide in our clinical settings. At the end of the month, we collect and evaluate our productivity based on the RVUs generated. And subsequently at the end of the year, like squirrels, we hope that we have accumulated enough “acorns” to store for our sultry winter of managed care, prior authorizations, and countless numbers of faxes back-and-forth to try and obtain services and medications on behalf of our patients.

Being in the trenches, I had never realized the painstaking amount of detail that was taken to enact and implement one single CPT code. However my eyes were opened to the extremely tedious process when I was asked to be a “fifth string quarterback” as part of the delegation for the American Academy of Family Physicians to the RUC. Whenever a single procedure or new potential CPT code is considered, the specialty that is bringing the evaluation to the table is placed at the end of a large rectangular board table. This is truly impressive in that it resembles senatorial type of hearing in presenting a single CPT code. After two days of observing this process, I came away with a sense of validation and amazement at the same time. This was because the process of how we value our services is really discussed, elaborated, and placed into a very intricate process, which makes me feel very comfortable that our patients interests are best served. The fees that we actually generate for the services we provide to our patients are truly a fair and equitable process, which has a great deal of time and sweat equity placed in order to provide services at a fair valuation.

Interestingly, there are publications which have described this process as a “secret society” of the AMA diabolically inclined to enhance the incomes of the physician component of the medical profession. My personal introduction to the process truly refutes any of the assumptions made in the periodicals that I have reviewed.

My dialogue in this message is not to give a detailed dissertation into the workings of how we are paid. It is intended to help us understand that our profession has a very intricate scientifically-based process into the workings of our everyday fee schedule. The public is protected by a critically validated process and we are compensated justifiably in being able to realize the end result of our education, training and labor.

Now onto the holidays…..As the Thanksgiving, Christmas, and New Year holidays are upon us, it gives  us a vast opportunity to reflect on the great privilege that we have in our medical profession. The opportunity to serve our patients is truly a rare privilege indeed. Understandably sleepless nights, time away from family, and challenging personalities make for a very daunting environment in our day-to-day lives. However, I always keep a file of the short notes of kind commentary that patients have sent over the years that truly erase the days where it seems that a dark cloud is following me. We, as a profession, have been given a God given opportunity to make a difference in people’s lives. It is this gratitude of being in the medical profession. The gratitude of serving as a physician and having the privilege of having all of you as colleagues that leads me to wish all of you in our society and our profession the best of holidays and season’s greetings!

The RUC is important, but serving God, our families, and our patients trumps all.