“Those aaa–aaa–are…the good old days” – Carly Simon, Anticipation
Could we look back on the current fee structure and say, “those were the good old days”?
New cuts in physician fee schedule (PFS) reimbursements may be under active consideration at the Centers for Medicare and Medicaid Services (CMS).
Judging by the frantic way the American Association of Hip and Knee Surgeons (AAHKS) objected to a CMS decision to review relative-value-units (RVUs)—or, more precisely, ask the people who influence the creation of RVUs—for total knee arthroplasty (TKA) and total hip arthroplasty (THA), a new review of physician pay is in the works.
Apparently, there are new concerns that RVUs, and therefore reimbursement rates for total joint physician fees are “misvalued” (a euphemism meaning “too high”?).
What Just Changed
RVU decision-making rests with the American Medical Association (AMA) and medical specialties’ RVS Update Committees (RUCs). These RUCs have endured heaps of criticism in recent years:
In 2015, a U.S. Government Accounting Office (GAO) report told Congress, “First, the RUC’s process for developing relative value recommendations relies on the input of physicians who may have potential conflicts of interest with respect to the outcomes of CMS’s process…. Second, GAO found weaknesses with the RUC’s survey data.”
The GAO seemed uncomfortable with the fact that CMS accepted RUC recommendations for RVUs 69% of the time in 2015. GAO also noted (as did CMS in its 2019 PFS final rule) that the law requires CMS to review rates every five years.
Then came a December 2016 report, in which the Urban Institute said surgeons are often paid under surgery codes for preoperative work done in office visits which are also billed, and that some codes are set up to pay for postoperative visits which are nowadays handed off to other practitioners (who also bill).
Families USA, a patient advocacy group, wrote in a September 11, 2017 letter to CMS regarding Notice of Proposed Rulemaking for the 2018 PFS rates that: “Accepting practitioner calls to “rely more heavily on RUC-recommended values,” the NPRM [notice of proposed rulemaking] states a policy of “generally propos[ing] RUC recommended work RVUs [Relative Value Units] for new, revised, and potentially misvalued codes.”
“The proposed rule thus accepts 262 out of 263 recommendations from the American Medical Association’s RVS [relative value scale] Update Committee (RUC) for 2018 work RVUs. This 99.6% agreement rate is 30 percentage points higher than the 69% rate reported by the Government Accountability Office (GAO) in 2015, reflecting CMS’s dramatic change in policy.”
(The AMA says in a summary of the final rule that for 2019, “CMS accepted 80% of the RUC recommendations and 87% of the RUC Health Care Professional Advisory Committee Review Board recommendations for CPT”—way up from the 69% that concerned the GAO, but less than the 99.6% cited by FamiliesUSA.
Then, on September 4, 2018, the federal Medicare Payments Advisory Commission (MedPAC), submitted a letter to CMS on the then-proposed 2019 rates, saying, “there is evidence that 10-day and 90-day global surgical codes are overpriced…”
Enter ‘Anonymous’
CMS wrote on pages 168+ of the 2,379-page final rule for the 2019 rates that an unnamed member of the public claimed that seven CPT codes, including 27130 (THA) and 27447 (TKA) are misvalued.
Apparently, this submitter, whom the AAHKS refers to as “the anonymous submitter,” was the chief reason that seven high-volume reimbursement codes, including the codes for total knee and total hip replacement physician fees, were sent back for further review.
AAHKS had previously criticized the comments of “the anonymous submitter” in a September 10 letter it posted on the 2019 PFS rulemaking docket (scroll down to the last paragraph of page 1 and beyond for its full comments).
According to AAHKS, the anonymous submitter “stated that a number of reports by media and federal advisory agencies found ‘a systemic overvaluation of work RVUs.’ The submitter argues that overestimates are due to preservice and postservice time (including follow-up inpatient and outpatient visits that do not take place) and intraservice time, and that previous RUC reviews did not capture these overestimates.”
AAHKS disagreed with ‘Anonymous’, saying in that same September letter, “Most importantly, we note that the RUC and CMS already reviewed and validated the current RVU values most recently in 2013.”
Physicians Receive Only 3-4% of THA or TKA Costs
In a November 15, 2018 news release, AAHKS President Craig J. Della Valle bolstered that argument saying, “Given the high societal value that these procedures provide, penalizing the surgeon (whose compensation is a small fraction of the total cost of the episode of care in DRGs 469 and 470) for improvements in care seems unfair, misguided, and may threaten access to care.”
He’s right about the “small fraction” part, of course.
The physician fee is only about 3-4% of a total hip or total knee arthroplasty procedure cost. Specifically, the 2018 Medicare rate for 27447 (TKA) is $1,399-$1,566, and for 27130 (THA) $1,406-$1,568. As a percent of the total amount billed for those procedures—$49,500 in 2017 for TKA, according to Healthline, and averaged $39,299 for THA, according to Blue Cross-Blue Shield of North Carolina—which brings the physician fee percentage to a very small 3-4%.
FamiliesUSA struck at the core of CMS’ dilemma: “Both for Medicare beneficiaries and others, the current imbalance between payment for specialty and primary care, driven in significant part by Medicare fee schedules, greatly undermines consumers’ access to essential primary care services.”
In other words, patient advocates say the RVU system, as controlled by the RUCs, starves primary care and feeds specialists. CMS seems to be listening to that argument at the moment.
