RUC 101


What is RUC?

The American Medical Association RUC stands for the Relative Value-Scale Update Committee and it is an expert panel of physicians which recommends valuation of physician services. The RUC seeks to be representative of “the house of medicine” as 21 of its 31 members are appointed by major national medical specialty societies.  The RUC meets three times per year to develop its recommendations to CMS. Federal law requires CMS to review all relative values at least every five years and identify services that are likely to be misvalued on an ongoing basis. In the 2012 Medicare Physician Fee Schedule Final Rule, CMS announced they would no longer use the five-year method. Rather, the agency will conduct annual reviews with the same processes for identifying codes for review.

How Does the RUC Evaluate Codes?

The relative value of a service has three components: the value of physicians’ work, the practice expense, and the cost of professional liability insurance. The RUC is primarily concerned with the physician work and practice expense components. In its periodic adjustments to relative values, CMS intends to account for changes in coding, medical practice, and new information about the aforementioned components. CMS and the RUC initiate adjustments by identifying potentially misvalued services for review. These services may have changed site-of-service, experienced fast growth, experienced substantial changes in practice expenses, or have not been reviewed recently. 

Once the RUC has a list of services for review, it consults the appropriate medical specialty societies whose members perform the code. The medical societies submit a level of interest for any services their members provide and will implement AMA RUC surveys to assess the time and intensity of the service and recommend a total work value. In addition, these AMA RUC surveys compare the service to a list of other services recently valued and approved by the RUC used as reference points. Survey results are compiled and discussed by representatives from the relevant specialty societies. The resulting recommendations are presented to the RUC at its next meeting.

The RUC may elect to adopt a specialty society’s recommendation, refer it back to the specialty society for further refinement, or modify it prior to submitting it to CMS. CMS publishes the approved values in the proposed Medicare Physician Fee Schedule each summer and solicits comments. Final values are published in November each year in the Final Medicare Physician Fee Schedule Rule.

Why is This Process Important?

*The size of the Medicare payment pool is fixed. Inherent in the valuation process is the understanding that CMS spending is fixed by law. Increasing the value of a particular code would result in a corresponding decrease in reimbursement for other procedures.  

*You are the source for accurate data. Member responses to these AMA RUC society surveys dictate the discussions to the RUC. Complete, accurate, and credible responses may ensure that nuclear cardiology CPT codes are reimbursed appropriately.   

*CMS payment decisions have a ripple effect. Many payers coordinate their payments to the Medicare Physician Fee Schedule, including 85 percent of private payers and 69 percent of Medicaid programs (Smith & Fischoff, 2007).    
For more information, please view the video produced by the American Medical Association.