RUC ensures physician input on procedure codes

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"What the RUC?"

Behind the clever title lay a very practical presentation designed to demystify the American Medical Association (AMA)/Specialty Society Relative Value Update Committee or RUC, first created in 1992. On March 2 at the annual meeting of American Academy of Dermatology (AAD) in Washington, D. C., Mark D. Kaufmann, M.D., joined four other colleagues fluent in coding and office management to explain the nuances.

Dr. Kaufmann is also a member of AAD's Board of Directors. His goal was to "lay out the process" of code valuation, a topic often pondered but not always thoroughly understood. Even if perceived to be somewhat "enigmatic" overall, the RUC is actually a fair and balanced system, he says.

That's because after the RUC evaluates a procedure code, it sends its recommendations to the Centers for Medicare and Medicaid Services (CMS). The agency then makes the final decision on valuation, but the RUC's involvement ensures input from physicians who provide invaluable expertise on complex medical procedures.

HOW CPT CODES ARE 'VALUED'

Dr. Kaufmann explained that most commercial insurance fee schedules are based on a percentage of the Medicare Fee Schedule, which is decided with consideration of advice and recommendations of the RUC.

It helps to understand the relative value unit or RVU, comprised of three components: practice expense, physician work and liability insurance, he said. Separate physicians' and nurses' time, along with supplies and equipment, are valued by the expert panel's assessment as components of a provided medical service. To whittle down further, physician work contains four components: time to perform service; technical skill and physical effort; mental effort and judgment; and psychological stress.

Payment is calculated via an equation of Total RVU X Conversion Factor, the latter number determined by Medicare each year.

COMMUNITY INPUT

In addition to physicians and medical advisors, 100 specialty societies and organizations also submit data around valuations for new and revised CPT codes via surveys, Dr. Kaufmann said.

"It's a pretty obscure process that you don't learn in residency," he said. "Because you will eventually receive a survey, you need to understand how important it is and that you'll need to take time to fill it out in a thoughtful manner."

What's old is renewable again, and codes do come up for review at RUC.

"CMS doesn’t care why code use goes up," he said. "Let's say a code is new or revised, or it increases in use at 10 percent or more a year for three years. Maybe CMS simply sets its sights on a code for a variety of reasons. Then the specialty that is the main user of the code must survey those codes to refine work values," Dr. Kaufmann said.

For dermatologists who've wondered what all the RUCkus is about, Dr. Kaufmann's presentation conveyed user-friendly insights about how those ubiquitous codes used every day in dermatology evolve to keep pace with the specialty and the science.

Reference:
F048 - Coding and Office Management, Room 201. “What the RUC?” Mark D. Kaufmann, M.D. 9:48 a.m., March 2, American Academy of Dermatology, Washington D.C.