Jeffrey Edelstein, MD, currently serves as the Associate Secretary for Health Policy and an advisor to the AMA-RUC representing the American Academy of Ophthalmology (AAO).
Dr. Edelstein recently chaired a symposium on physician payment policy at the 2017 meeting of the American Academy of Ophthalmology, where he commented that the typical CPT code valuation through the RUC process can take a up to one year or longer before a value is finally introduced to the marketplace.
This contrasts with the free market, where values are negotiated between buyer and seller with an immediate result. A truly free market is fair when the buyer has true price transparency and the seller must know the cost to provide the goods and services.
The free market is the most efficient way to value goods and services, but may have negative results to both the buyer and seller when price discovery is distorted by a lack of accurate information.
Prior to RBRVS, cataract surgery paid more than $2,000, and by law, private insurers had to pay more than Medicare.
“The RBRVS, as written by Professor William Hsaio at Harvard University was unfinished when adopted by Congress in 1992,” according to Dr. Edelstein.
The major purpose for the RUC was to fine-tune the process over time. In RBRVS, payment is based on relative value units (RVUs) from three primary components: physician work (wRVUs), practice expense (peRVUs), and professional liability insurance cost (pliRVUs). Payments are derived from the total value of these three components multiplied by a conversion factor set annually by Congress ($35.9996 in 2018).