American College of Physicians: Internal Medicine — Doctors for Adults ®


Finding common ground when some gain and others lose

From the October ACP Internist, copyright © 2009 by the American College of Physicians

By Robert B. Doherty

Proposals that redistribute money pose a special challenge to physician membership organizations. Physicians expect their societies to represent their interests, but what happens when one subset of members stands to benefit at another’s expense?

Some would argue for a neutral course: why take sides when some members will be unhappy? Neutrality, though, is in itself taking a position of not supporting a benefit to some members because it will upset others.

Another option is to go with the majority. But “majority rules” is not always the fairest way to set policy, particularly when it involves complex changes in payment policies. Also, generalizations about the impact on a specialty do not predict how any single physician would fare. Physicians, even in the same specialty, have different practice sizes, types, patient case- mixes and combinations of services.

A third option is to take a position intended to achieve the greatest good for patients and let the chips fall where they will, while making sure that there are opportunities for those who are disadvantaged to have their concerns addressed. This is how ACP responded to a Medicare proposed rule to update physician practice expense payments.

Medicare payments for each physician service are based on relative value units (RVUs) that, when multiplied by a “conversion factor,” set the payment. RVUs, in turn, are based on the relative differences in the physician work, practice expenses and medical liability costs associated with each service. Practice expenses constitute about 45% of the total RVUs for each service.

For most physician services, RVUs are based on a multi-specialty survey conducted in the late 1990s. A few years ago, some specialty societies paid for their own practice expense surveys, and Medicare agreed to update RVUs based on such “supplemental data” even as other specialties continued to be paid under the old survey data. This tended to give an advantage to specialties that could afford to fund their own surveys and put at a disadvantage those that could not afford a supplemental survey.

In a proposed rule published this June, Medicare asked for comments on its plans to update the practice expense RVUs based on a new survey conducted across all specialties. The survey was hosted and partially funded by the AMA, with support from dozens of specialty societies. All RVUs, including those based on the specialty-specific supplemental data, would be updated beginning in 2010. Changes would be “budget neutral” within physician payments, meaning that some services would receive higher payments, and others lower ones, but total spending on all physician services would remain the same. Medicare will announce its decision in November.

The proposed rule would substantially redistribute payments among physicians generally and within internal medicine. Many evaluation and management services would receive higher payments, while the reimbursement for some procedures would be reduced. Medicare estimates that general internists on average would gain 4% in total Medicare allowable charges, while cardiologists on average would get a 10% reduction.

The American College of Cardiology (ACC) cried foul, arguing that the cuts would have a devastating impact on access to cardiovascular care, and that the AMA’s multi-specialty survey included too few cardiology practices to be valid. They lobbied Congress to pressure Medicare to halt or postpone the changes.

ACP’s view

ACP affirmed its long-standing support of a multi-specialty survey, designed with the input of all specialties, to improve the accuracy and fairness of the practice expense RVUs. In 2006, ACP joined with the ACC and 75 other societies to advise Medicare that it was imperative to conduct such a survey as a basis for updating the practice expense RVUs. Along with the ACC and other specialty societies, ACP contributed financially to the survey and had considerable input into its design through the RVS Update Committee (RUC). ACP shares the RUC’s view that the new survey was applied fairly and consistently across specialties and should be used to update the RVUs.

At the same time, ACP recognizes that individual specialties have concerns about how the survey data apply to their specialties. ACP called on Medicare to initiate an open and transparent process to consider comments from individual specialty societies and to allow for refinements of the practice expense RVUs, when appropriate, based on review of the comments.

ACP’s position won’t make everyone happy. The approach, though, is designed to achieve the greatest good for patients by making sure that practice expense payments are based on the most recent data available, collected in a consistent manner across specialties, while ensuring there are opportunities for those who are disadvantaged to have their concerns addressed in an open and transparent manner.


ACP Internist Weekly

From the March 24, 2015 edition

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