Forum Session

Assessing Progress on Improving the Data Behind Medicare’s Physician Fee Schedule
February 17, 2012


Kathryn Linehan


Medicare’s physician fee schedule distributes over $60 billion annually and is a critical determinant of individual physicians' incomes, beneficiaries' access to health care services, and Medicare spending, as well as the basis for physician fees used by many private payers. The fee schedule is based on relative values (RVUs) assigned each service reflecting the resources required to produce that service in comparison to all other services. The Centers for Medicare & Medicaid Services (CMS) is responsible for Medicare’s fee schedule and relies heavily on the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC), an independent group of physicians, to provide recommendations on fees for new services and changes to the fees of selected services. Although both CMS and the RUC have updated and improved the data and methods for developing the values assigned physician services, concerns remain about the adequacy and validity of the data, the transparency of the processes, involvement of medical specialty societies, and CMS’s oversight. To address ongoing concerns about potentially misvalued services on the physician fee schedule, the Patient Protection and Affordable Care Act (PPACA) directed the Secretary to examine specific categories of services to improve RVU accuracy and to establish a process to validate RVUs under the fee schedule. In this Forum session, speakers discussed the data underlying Medicare’s physician fees, the process for developing the relative values assigned to physician services, progress on implementing provisions in PPACA, and recent changes to the processes and composition of the RUC. Speakers also described and assessed current and past efforts to improve the accuracy of the physician fee schedule and highlighted areas for future improvement.


Related Materials

Laura Dummit, "Medicare Physician Fees: the Data Behind the Numbers" (Issue Brief No. 838, July 22, 2010.

Medicare Payment Advisory Commission, "Moving forward from the sustainable growth rate system," letter to the Chairs and Ranking Members of the Senate Committee Finance, the House Committee on Ways and Means, and the House Committee on Energy and Commerce, October 14, 2011.

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