Accuracy of Valuations of Surgical Procedures in the Medicare Fee Schedule

Abstract

BACKGROUND The Relative Value Scale Update Committee (RUC) of the American Medical Association plays a central role in determining physician reimbursement. The RUC’s role and performance have been criticized but subjected to little empirical evaluation. METHODS We analyzed the accuracy of valuations of 293 common surgical procedures from 2005 through 2015. We compared the RUC’s estimates of procedure time with “benchmark” times for the same procedures derived from the clinical registry maintained by the American College of Surgeons National Surgical Quality Improvement Program (NSQIP). We characterized inaccuracies, quantified their effect on physician revenue, and examined whether re-review corrected them. RESULTS At the time of 108 RUC reviews, the mean absolute discrepancy between RUC time estimates and benchmark times was 18.5 minutes, or 19.8% of the RUC time. However, RUC time estimates were neither systematically shorter nor longer than benchmark times overall (β, 0.97; 95% confidence interval, 0.94 to 1.01; P = 0.10). Our analyses suggest that whereas orthopedic surgeons and urologists received higher payments than they would have if benchmark times had been used ($160 million and $40 million more, respectively, in Medicare reimbursement in 2011 through 2015), cardiothoracic surgeons, neurosurgeons, and vascular surgeons received lower payments ($130 million, $60 million, and $30 million less, respectively). The accuracy of RUC time estimates improved in 47% of RUC revaluations, worsened in 27%, and was unchanged in 25%. (Percentages do not sum to 100 because of rounding.) CONCLUSIONS In this analysis of frequently conducted operations, we found substantial absolute discrepancies between intraoperative times as estimated by the RUC and the times recorded for the same procedures in a surgical registry, but the RUC did not systematically overestimate or underestimate times. (Funded by the National Institutes of Health.)

Equality of Surgical Fee Schedule in Japan: A Retrospective Observational Study

“…Although reducing the inequality may not be policymakers’ first priority, they should pay some attention to this aspect to maintain a quality outcome of surgery. Sixth, we did not discuss the overtime discrepancy in the effects of revisions of fee schedules unlike the study by Chan et al 27 Moreover, we did not show which surgical specialties obtained benefits from the revisions in this study because the difference between winners and losers from the revisions has been the same throughout the study periods; according to our previous studies, 5 - 7 neurosurgeons, thoracic surgeons and cardiovascular surgeons had always gained advantages while otolaryngologists had suffered. Therefore, we did not use panel data analysis, such as the fixed-effect model.…”

Patient complexity by surgical specialty does not correlate with work relative value units

“…Discrepancies between RUC estimated operative times and measured operative times across surgical specialties has identified that current RVU allocation may not be appropriate. Chan et al 5 assessed operative time estimates in NSQIP compared with RUC estimates and found that vascular surgery was undervalued in the amount of US$30 million in missed revenue. There was also an underestimate of time required in cardiac surgery, equating to US$130 million of missed revenue.…”

“…The RUC often has been criticized, and recent evidence suggests that the RUC estimates on time spent performing various operations are innacurate. 5 RUC updates to RVUs are a zero-sum game and are based largely on expert opinion rather than on evidence, creating the potential for misappropriation of resources. 4 Many health care systems have moved toward RVU-based compensation models aimed at incentivizing productivity.…”

Time is Money: Relative Value Units and Operative Time in Otolaryngology

“…This finding is in contrast to a previous study by Chan et al, that showed benchmark operative times used in determining the assignment of wRVUs for a variety of surgical procedures are sometimes inaccurate when compared to actual operative times. 18 Notably, the aforementioned study was not specific to procedures performed by otolaryngologists; however, if a discrepancy does exist between benchmark and actual operative times in otolaryngology, this discrepancy does not seem to have a significant impact on physician hourly reimbursement.…”