The AAP Committee on Coding and Nomenclature (COCN) works to ensure pediatricians are paid appropriately through representation on the American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee (RUC).
The RUC makes recommendations to the Centers for Medicare & Medicaid Services (CMS) on the value of Current Procedural Terminology (CPT) codes based on the resources needed to provide medical services. The CMS uses this information to determine payment for physician services, under the Medicare Physician Fee Schedule (MPFS). Some payers use the MPFS to help determine service coverage and payment rates.
Pediatricians can support their financial sustainability and influence the future of pediatric care by participating in AAP surveys that are used to make recommendations to the CMS.
Relative value units
The RUC, along with the CPT Editorial Panel, has created a process where medical specialty societies can develop relative value recommendations for new, revised and potentially misvalued codes as well as update relative value units (RVUs) to reflect changes in medical practice.
An RVU consists of three components: physician work, practice expense and professional liability insurance expense.
The physician work component is crucial, and the involvement of COCN with the RUC ensures pediatricians and pediatric specialists receive fair valuation for their services.
How physician work is valued
Work relative value units (wRVUs) illustrate the physician’s efforts in delivering care. They represent more than 50% of the RVUs assigned to a specific service.
Several factors contribute to this value, including technical skills required, physical effort involved, mental effort and judgment exercised, stress related to patient risk and the amount of time needed to complete the service or procedure. Services are valued based on the typical patient receiving the service.
Work RVUs represent three stages of medical practice:
- preservice work: physician work performed before a procedure, such as review of records and discussions with other physicians or clinical staff;
- intra-service work: activities conducted during the procedure (skin-to-skin time) or face-to-face time spent in office visits; and
- post-service work: documentation, discussion with patient, family or other health care professionals, and post-operative visits.
The AAP conducts comprehensive surveys of members to gather data that are shared with the RUC to assist in the development of wRVUs. Surveys are carefully crafted and distributed to a randomly selected group of members, ensuring a diverse representation of perspectives. Participation in these surveys is essential.
Who determines RVUs
The RUC has several options when considering proposed RVUs: approve them, reject them if they are considered unsupported or refer the issue to a facilitation committee for resolution.
If the RUC cannot approve or negotiate an acceptable value, it may establish an interim value and ask the sponsoring society to conduct another survey for future evaluation, refer the code back to the CPT Editorial Panel for refinement or recommend the code be contractor priced.
This structured process ensures that the values reflect the complexities of physician work and practice expenses, influencing health care economics and payment policies.
The values for physician work that receive approval from the RUC are sent to the CMS for review and consideration. Historically, the CMS accepts more than 90% of the values approved by the RUC, indicating a strong alignment between the two organizations on the valuation of physician services.
In addition to confirming comprehensive evaluations of work values, the CMS also establishes the final values for direct practice expense components (e.g., clinical labor activities, medical supplies and equipment) considering recommendations by the RUC and other sources of data. The RUC’s recommendations for indirect costs include the direct practice expense components and the indirect expenses of running a medical practice (e.g., staff salaries, equipment and overhead expenses). Furthermore, the CMS assigns a value to professional liability insurance, which is a smaller but essential component of a physician’s operational costs. Together, these processes ensure a well-rounded determination of practice expense values that reflect the actual costs of providing medical services.
The values approved by the CMS are vital for determining payment rates for health care services. Once approved, they are published in the Federal Register, providing essential information to the public and health care community.
Staying informed and engaged allows pediatricians to advocate for equitable payment practices that recognize the unique challenges of their patients, ultimately improving quality of care for communities.
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