EyeWorld is the official news magazine of the American Society of Cataract & Refractive Surgery.
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16 EW NEWS & OPINION January 2013 Chief medical editor's corner of the world Who determines the value of cataract surgery? by David F. Chang, M.D., chief medical editor includes the RVU valuations, geographical adjustments, and conversion factors. In simple terms, a decrease in the RVUs will result in a decrease in reimbursement and vice versa for an increase in RVUs. T he recently announced cuts to Medicare reimbursement for cataract surgery have confused and angered many ophthalmologists. Separate from additional across-theboard reductions called for by the sustainable growth rate (SGR) and the fiscal budget cliff, these cuts to our most commonly performed procedure seem inherently unfair in light of the improved surgical outcomes and the life-altering impact it has on patients' lives. According to a landmark cost utility study, cataract surgery had a present value of $95,000, which was higher than that for other common and costlier treatments such as breast cancer ($20,000) or myocardial infarction ($70,000).1 The problem, of course, is with how the Centers for Medicare and Medicaid Services (CMS) assigns value. In business, and virtually everywhere else in our free market society, value is determined by what someone would be willing to trade for that service or product. For refractive surgery, we have a good sense of the free market value of reduced spectacle dependence. In this context, an operation that reliably halts and permanently reverses a progressive blinding condition should be worth a lot. However, in 1992 CMS adopted the resource-based relative value scale (RBRVS), which was developed in the 1980s by William Hsiao, a Harvard economics and health policy professor. These formulas are used to quantify how much a cataract operation should be reimbursed relative to a scleral buckle, a visual field, an angioplasty, or a renal transplant. Instead of considering the value that patients would assign to an outcome (e.g., cost utility data cited above), this approach bases payment on the costs of providing a service, relative to those for all other types of medical services. Surgical time is a major component of this cost determination. The AMA administers the system of current procedural terminology (CPT) codes. Past ASCRS president and Government Relations Committee member Stephen Lane, M.D., has been representing ASCRS in an advisory capacity for the AMA/Specialty Society Relative Value Scale Update Committee (RUC) that reviews and recommends RBRVS values for each CPT code to CMS. He and many others who serve organized ophthalmology in this role have had the thankless job of advocating for us within this complicated system. This is also a dynamic process, which at regular intervals reassesses the relative values of all CPT procedures and services based on the Hsiao methodology. So for Medicare patients, the answer to the question posed by this column isn't simply "the government." There is an academically derived model for relative procedural valuation, and this month, I've asked Stephen to explain more about this process. Reference 1. Cutler DM, McClellan M. Is technological change in medicine worth it? Health Aff (Millwood) 2001;20:11-29. David F. Chang, M.D., chief medical editor Dr. Chang: Is the system designed to generate Medicare savings, or is it budget "neutral"? Dr. Chang: As background, can you describe the RBRVS system and how the relative "value" of different procedures and services is determined? Dr. Lane: CMS uses a system called the resource-based relative value system (RBRVS) to determine values for Medicare physician payment calculations. The RBRVS is essentially a ranking of each Medicare-covered physician service based on the total resources required to perform each service. Because it is based on resources, the RBRVS does not reflect such factors as the value of a service to the patient. The relative value for each service consists of three main components: work, practice expense, and malpractice values. The work component is calculated by assigning both "time" and "intensity" values to a specific code. Intensity includes mental effort and judgment, technical skill, physical stress, and psychological stress. The practice expense component reflects overhead costs, and the malpractice component reflects the portion of the service practice expense attributable to the cost of physician liability insurance. Each component is measured in relative value units (RVUs). Determination of reimbursements by CMS is then based on a calculation that uses a formula that Dr. Lane: The actual process of updating the values through the RUC is budget neutral. It is simply a redistribution of the currently available funding pool. However, when the actual RBRVS system was enacted by Congress, it was part of overall physician payment reform, which also included balance billing limitations and the establishment of the precursor to the SGR formula—the Medicare Volume Performance Standards—based on expenditure targets. As a result of this system, all specialties try to make (argue) their point to increase reimbursement (or at least try to keep it the same) to the RUC. However, any increase in reimbursement for a procedure or level of exam will need to be offset by a decrease in reimbursement somewhere else. This may be within the same specialty or outside it, so all specialties are competing for the same dollars as the total pot of money for reimbursement stays the same. Dr. Chang: How is this system implemented? Who serves on the RUC and who represents ophthalmologists in the process? Dr. Lane: Typically, the RVUs are reassessed every five years. The RUC has been charged to perform this evaluation and is composed of physician members of representative specialties. In addition, each specialty organization has a representative that serves as an "advisor." Following a very specific evaluation process, the RUC makes recommen-