Medicare Physician Payment Rates:
Better Data and Greater Transparency Could Improve Accuracy
GAO-15-434: Published: May 21, 2015. Publicly
Released: May 21, 2015.
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What GAO Found
The American Medical Association/Specialty Society Relative Value Scale
Update Committee (RUC) has a process in place to regularly review Medicare
physicians' services' work relative values (which reflect the time and intensity
needed to perform a service). Its recommendations to the Centers for Medicare
& Medicaid Services (CMS), the agency within the Department of Health and
Human Services (HHS) that administers Medicare, though, may not be accurate due
to process and data-related weaknesses. 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.
While the RUC has taken steps to mitigate the impact of physicians' potential
conflicts of interest, a member of the RUC told GAO that specialty societies'
work relative value recommendations may still be inflated. RUC staff indicated
that the RUC may recommend a work relative value to CMS that is less than the
specialty societies' median survey result if the value seems accurate based on
the RUC members' clinical expertise or by comparing the value to those of
related services. Second, GAO found weaknesses with the RUC's survey data,
including that some of the RUC's survey data had low response rates, low total
number of responses, and large ranges in responses, all of which may undermine
the accuracy of the RUC's recommendations. For example, while GAO found that the
median number of responses to surveys for payment year 2015 was 52, the median
response rate was only 2.2 percent, and 23 of the 231 surveys had under 30
respondents.
CMS's process for establishing relative values embodies several elements
that cast doubt on whether it can ensure accurate Medicare payment rates and a
transparent process. First, although CMS officials stated that CMS complies with
the statutory requirement 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. Second,
CMS's process is not fully transparent because the agency does not publish the
potentially misvalued services identified by the RUC in its rulemaking or
otherwise, and thus stakeholders are unaware that these services will be
reviewed and payment rates for these services may change. Third, CMS provides
some information about its process in its rulemaking, but does not document the
methods used to review specific RUC recommendations. For example, CMS does not
document what resources were considered during its review of the RUC's
recommendations for specific services. Finally, the evidence suggests—and CMS
officials acknowledge—that the agency relies heavily on RUC recommendations when
establishing relative values. For example, GAO found that, in the majority of
cases, CMS accepts the RUC's recommendations and participation by other
stakeholders is limited. 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. CMS has begun to research ways to
develop an approach for validating RUC recommendations, but does not yet have a
specific plan for doing so. In addition, CMS does not yet have a plan for how it
will use funds Congress appropriated for the collection and use of data on
physicians' services or address the other data challenges GAO identified.
Why GAO Did This Study
Payments for Medicare physicians' services totaled about $70 billion in
2013. CMS sets payment rates for about 7,000 physicians' services primarily on
the basis of the relative values assigned to each service. Relative values
largely reflect estimates of the physician work and practice expenses needed to
provide one service relative to other services.
The Protecting Access to Medicare Act of 2014 included a provision for GAO
to study the RUC's process for developing relative value recommendations for
CMS. GAO evaluated (1) the RUC's process for recommending relative values for
CMS to consider when setting Medicare payment rates; and (2) CMS's process for
establishing relative values, including how it uses RUC recommendations. GAO
reviewed RUC and CMS documents and applicable statutes and internal control
standards, analyzed RUC and CMS data for payment years 2011 through 2015, and
interviewed RUC staff and CMS officials.
What GAO Recommends
CMS should better document its process for establishing relative values and
develop a process to inform the public of potentially misvalued services
identified by the RUC. CMS should also develop a plan for using funds
appropriated for the collection and use of information on physicians' services
in the determination of relative values. HHS agreed with two of GAO's
recommendations, but disagreed with using rulemaking to inform the public of
RUC-identified services. GAO clarified that the recommendation is not limited to
rulemaking.
For more information, contact James C. Cosgrove at (202) 512-7114 or cosgrovej@gao.gov.
Recommendations for Executive Action
-
Status:
Open
Comments: When we confirm what actions the agency has
taken in response to this recommendation, we will provide updated
information.
Recommendation: To help improve CMS's process for
establishing relative values for Medicare physicians' services, the
Administrator of CMS should better document the process for establishing
relative values for Medicare physicians' services, including the methods used
to review RUC recommendations and the rationale for final relative value
decisions.
Agency Affected: Department of Health and Human Services:
Centers for Medicare and Medicaid Services
-
Status:
Open
Comments: When we confirm what actions the agency has
taken in response to this recommendation, we will provide updated
information.
Recommendation: To help improve CMS's process for
establishing relative values for Medicare physicians' services, the
Administrator of CMS should develop a process for informing the public of
potentially misvalued services identified by the RUC, as CMS already does for
potentially misvalued services identified by CMS or other stakeholders.
Agency Affected: Department of Health and Human Services:
Centers for Medicare and Medicaid Services
-
Status:
Open
Comments: When we confirm what actions the agency has
taken in response to this recommendation, we will provide updated
information.
Recommendation: To help improve CMS's process for
establishing relative values for Medicare physicians' services, the
Administrator of CMS should incorporate data and expertise from physicians and
other relevant stakeholders into the process as well as develop a timeline and
plan for using the funds appropriated by the Protecting Access to Medicare Act
of 2014.
Agency Affected: Department of Health and Human Services:
Centers for Medicare and Medicaid Services