April 18, 2019

Accuracy of surgical procedure valuations in Medicare’s Fee Schedule

By: Judy Mathias
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Editor’s Note

The Center’s for Medicare and Medicaid Services (CMS) is legally responsible for setting and updating the work element of its relative value units (RVUs), which form the Medicare Physician Fee Schedule used to determine physician payments. In practice, however, updating what is known as the “work RVU” is largely delegated to the Relative Value Scale Update Committee (RUC) of the American Medical Association.

In this study, researchers investigated the accuracy of the measures of time the RUC uses to determine work RVUs for 293 common surgical procedures by comparing them to times recorded for the same procedures in the American College of Surgeons National Surgical Quality Improvement Program (NSQIP).

The mean absolute discrepancy found between RUC and NSQIP times was 18.5 minutes, or 19.8% of the RUC time, but RUC times were neither systematically shorter nor longer than NSQIP times overall.

For example, orthopedic surgeons and urologists received higher payments than they would have if NSQIP times had been used ($160 million and $40 million more, respectively, in Medicare reimbursement), but cardiothoracic surgeons, neurosurgeons, and vascular surgeons received lower payments ($130 million, $60 million, and $30 million less, respectively).

Reforms to how the federal government pays physicians may improve the accuracy and fairness of reimbursement. Whether it is feasible to implement the necessary reforms within the existing framework warrants careful consideration, however, the researchers say.

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