The transparency movement is shining a light into most every aspect of healthcare these days. How Medicare bases its payments rates, and who makes these rate recommendations, has garnered scrutiny recently, with the Government Accountability Office (GAO) stating that a lack of transparency is to blame for inflated payments to physicians. Their focus is on the American Medical Association’s committee, the AMA/Specialty Society Relative Value Scale Update Committee (RUC), a 31-member committee that makes recommendations to Medicare on the relative value of thousands of physician services.
The GAO’s report is not entirely out of left field as Medicare payment rates have been spotlighted over the last couple of years. Notably, a 2013 Washington Post article—entitled “How a Secretive panel uses data that distorts doctors’ pay”—questioned the “miraculous proficiency” of physicians performing colonoscopies. “In justifying the value it assigns to a colonoscopy, the AMA estimates that the basic procedure takes 75 minutes of a physician’s time, including work performed before, during and after the scoping,” notes the article. “But in reality, the total time the physician spends with each patient is about half the AMA’s estimate — roughly 30 minutes, according to medical journals, interviews and doctors’ records.”
To help CMS establish accurate relative values (both to generate initial relative values for new services and to maintain accurate relative values for existing services), the AMA created RUC, comprising representatives from different specialties. “To inform its decisions, the committee relies on surveys submitted by the relevant professional societies,” Washington Post states. “For example, in setting the value for a colonoscopy, the committee has turned to the American Gastroenterological Association and a similar group for information.”
GAO Report
The U.S. Government Accountability Office (GAO) GAO recently looked into RUC’s process for developing relative value recommendations for CMS. “GAO evaluated (1) the RUC’s process for recommending relative values for CMS to consider when setting Medicare payment rates; and (2) CMS’s process for establishing relative values, including how it uses RUC recommendations,” the Office states. “GAO reviewed RUC and CMS documents and applicable statutes and internal control standards, analyzed RUC and CMS data for payment years 2011 through 2015, and interviewed RUC staff and CMS officials.”
In its report, GAO found that RUC’s recommendations to CMS may not be accurate for two main reasons. “First, the RUC’s process for developing relative value recommendations relies on the input of physicians who may have potential conflicts of interest with respect to the outcomes of CMS’s process,” they state. “While the RUC has taken steps to mitigate the impact of physicians’ potential conflicts of interest, a member of the RUC told GAO that specialty societies’ work relative value recommendations may still be inflated.” GAO noted that RUC staff may attempts to account for the bias, but may not be as successful as they could be.
Second, GAO found that survey data the RUC used was flawed. “Some of the RUC’s survey data had low response rates, low total number of responses, and large ranges in responses, all of which may undermine the accuracy of the RUC’s recommendations,” the note. GAO mentions, for example, that they found that the median response rate was only 2.2 percent, and 23 of the 231 surveys had under 30 respondents.
In its recommendations to CMS, GAO found that the agency’s “process for establishing relative values embodies several elements that cast doubt on whether it can ensure accurate Medicare payment rates and a transparent process.”
GAO outlines four reasons for this assessment:
(1) Although CMS officials stated that CMS complies with the statutory requirement to review all Medicare services every 5 years, the agency does not maintain a database to track when a service was last valued or have a documented standardized process for prioritizing its reviews.
(2) CMS’s process is not fully transparent because the agency does not publish the potentially misvalued services identified by the RUC in its rulemaking or otherwise, and thus stakeholders are unaware that these services will be reviewed and payment rates for these services may change.
(3) CMS provides some information about its process in its rulemaking, but does not document the methods used to review specific RUC recommendations. For example, CMS does not document what resources were considered during its review of the RUC’s recommendations for specific services.
(4) The evidence suggests—and CMS officials acknowledge—that the agency relies heavily on RUC recommendations when establishing relative values. “Given the process and data related weaknesses associated with the RUC’s recommendations, such heavy reliance on the RUC could result in inaccurate Medicare payment rates,” concludes GAO.
“CMS should better document its process for establishing relative values and develop a process to inform the public of potentially misvalued services identified by the RUC,” GAO recommends. “CMS should also develop a plan for using funds appropriated for the collection and use of information on physicians’ services in the determination of relative values.”
View GAO’s full report here.