RUC Process

The Relative Value Scale Update Committee (RUC) provides the Center for Medicare and Medicaid Services (CMS) with recommendations for the relative value of the Current Procedure Terminology (CPT) codes.  While these are only suggestions, CMS accepts more than 90 percent of the work relative value recommendations for the more than 3,600 new and revised CPT codes. Therefore, the RUC plays a strong part in determining what physicians will be paid by CMS, and consequently by most insurance carriers.

In determining the relative value for any code, the largest factor that CMS takes into consideration is the physician work component--the time it takes to perform the service, the pre- and post- service work, the technical skill and physical effort, the required mental effort and judgment and stress due to the potential risk to the patient. This accounts for about 52 percent of the relative value for each service.

About 44 percent of the total relative value comes from the practice expense component.  This practice base component differs depending on the site of service—therefore, a procedure performed in a hospital would be valued differently that one performed in an outpatient surgical setting. Finally, the professional liability insurance (PLI) makes up about 4 percent of the total relative value. The PLI is also resource-based; therefore it also differs depending on site of service.

The RUC’s recommendations for practice expense are limited to the relative valuation of clinical staff (type and time); medical supplies (type and number of units); and medical equipment (type). The other factors described in the above categories are determined entirely by CMS. Congress determines how much money CMS will have for the annual physician fee schedule—the RUC divides up the section of pie related to staff, supplies and equipment according to each medical service in relation to each other.

So how does this group of 29 individuals come up with these relative values for practice expense and work? For practice expense, each presenter must defend in minute detail every last surgical glove, suture and minute of staff time. For work, each minute of physician time and the work intensity of that time is determined using the results from survey.

Codes come up for review because they are new, no longer used, there is a significant (greater than 10% per year for three years) growth in the utilization of the codes or there is a site of service anomaly (meaning, for example, that they are priced in a facility setting with discharge work but are typically done in an office setting). Additionally, there is a 5-year review process where specialties can bring forward misvalued codes and CMS can bring forward codes that it believes are overvalued. When codes come up for review, a survey must be conducted to present a recommended value for the codes in question. While RUC advisors can advocate for the specialty, members of the RUC themselves are not permitted to play an advocacy role, but rather that of an impartial evaluator and voting member of the RUC.

According to the AMA/Specialty Society RVS Update Process Booklet, “The societies are required to survey at least 30 practicing physicians. The RUC survey instrument asks physicians to use a list of 15 to 25 services as reference points that have been selected by the specialty RVS committee. Physicians receiving the survey are asked to evaluate the work involved in the new or revised code relative to the reference points. The survey data may be augmented by analysis of Medicare claims data and information from other studies of the procedure, such as the Harvard RBRVS study.” Several additional questions are added for those codes under the 5-year-review process. If more than one society has a strong interest in a procedure, those societies must coordinate efforts and come to a consensus recommendation to present to the RUC.