Profit over professionalism: the case of the Medicare Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) sets fees for 8000+ service codes that comprise the Medicare Physician Fee Schedule based largely on recommendations by the American Medical Association's Relative Value Update Committee (RUC) through notice-and-comment rulemaking. Under RUC supervision, medical specialty societies and other professional organizations ask members to estimate clinical time and "work" for codes. The RUC process eschews reliance on empirical data but rather relies almost entirely on the estimates from the surveys. Various ethical concerns about this process have arisen: physicians completing the survey may have biased judgments because they and their specialty colleagues directly benefit financially from their judgments and therefore inflate time and work estimates; some physicians describing the actual clinical activities comprising work to inform RUC members from other specialties exaggerate or invent work that they do not actually perform; and the AMA/RUC routinely misrepresents the performance of the RUC in determining accurate RVUs, while keeping much of their work protected from public scrutiny. This presentation describes the fee-setting process and elaborates on the ethical concerns that result in distorted fees, which in turn negatively affects access, quality, and spending for Medicare beneficiaries and the public at large.