A government watchdog report suggests that the Centers for Medicare & Medicaid Services may be setting Medicare payment rates inaccurately based on biased recommendations from its panel of physician experts.
The Government Accountability Office (GAO) questions the transparency of the CMS’ rate calculation process and suggests that members of the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) have conflicts of interest that affect their ability to fairly value physician services, according to a report published May 21.
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The GAO report recommends that the CMS better document its process for establishing relative values and develop a process to inform the public of potentially misvalued services identified by the RUC. The CMS also should develop a plan for using funds appropriated for the collection and use of information on physicians’ services in the determination of relative values, the report stated.
In response, the American Medical Association defended the expertise and objectivity of the RUC, stressing that there is no substitute for input from experienced physicians regarding the time and resources that go into medical services.
“The RUC’s valuable expertise is balanced with the oversight of government officials who have the final say,” an AMA spokesperson said in an interview. “When CMS’ initial efforts to identify potentially misvalued services were unable to obtain reliable data from government contractors, physicians on the RUC took on this important task. When gauging how much time and resources go into one medical service compared with another, no one knows more about what is involved in providing services to Medicare patients than the physicians who care for them.”
Dr. Robert L. Wergin, president of the American Academy of Family Physicians (AAFP) said the GAO report findings are consistent with previous concerns raised by the AAFP about the RUC.
“We have advocated for more transparency” in the past, Dr. Wergin said in an interview. “We have requested that the RUC expose the survey process, and we’ve also given input that we improve it [and] make it more accurate. Adding transparency to the process might be a way to improve it.”
In its review, the GAO – a nonpartisan investigational agency of Congress – cited several weaknesses in the data collected by the RUC, including that some RUC survey data had low response rates, a low total number of responses, and large ranges in responses.
For example, the GAO found that the median number of responses to surveys for payment year 2015 was 52 but the median response rate was only 2%, and that 23 of the 231 surveys had under 30 respondents.
The report also questions the transparency of the CMS process for establishing relative values. Although the CMS states that it complies with statutory requirements 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, according to the GAO report.
The CMS also does not publish the potentially misvalued services identified by the RUC, so stakeholders are unaware that these services will be reviewed and payment rates for these services may change.
The report found that the CMS provides some information about its process in its rule-making but does not document the methods used to review specific RUC recommendations. For example, the CMS does not document which resources were considered during its review of RUC recommendations for specific services. The GAO report said the CMS relies too heavily on RUC recommendations when establishing relative values.
“GAO found that, in the majority of cases, CMS accepts the RUC’s recommendations, and participation by other stakeholders is limited,” the report authors said. “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.”
The AMA argued that the GAO report should have better acknowledged the difficulty in obtaining data on services that are infrequently performed. For example, 80% of services paid with work valuation on the Medicare physician payment schedule have fewer than 10,000 Medicare claims per year, the association noted.
“A service performed 10,000 times per year, is done, on average, less than once per day in any state,” the AMA spokesperson said. “It would be nearly impossible to do accurate direct observation or time/motion studies to collect time data on these low volume services. The survey methodology, followed by rigorous cross-specialty RUC review, is the best way to accomplish this data collection.”
The current GAO report is far from the first to criticize the RUC. The AAFP has long argued that the RUC should include more family physicians, health plans, consumers, employers, and health care economists on its panel. In 2012, the committee added another seat for geriatric medicine and another rotating primary care seat.