- The Relative Value Scale Update Committee (RUC) over-allocated the time required to perform knee replacement surgeries by 23% and hip replacement surgeries by 18%, according to a recent Health Affairs study. Time over-allocations were even greater when previously implanted joints were being repaired or replaced. More than 80% of original replacements and more than 90% of revisions were performed in less time than allocated by the RUC.
- Time periods estimated to perform medical procedures, known as relative value units (RVUs), are crucial for determining how much surgeons and other doctors are paid for their work under the Medicare Physician Fee Schedule. The RUC mostly relies on small samples of self-reported data from doctors. Medicare rates often dictate commercial insurance reimbursement.
- Joint replacement procedures are among the most common surgeries performed in the United States, responsible for $10 billion in total direct costs to the Medicare program annually.
There has long been debate about whether doctors in the U.S. are appropriately paid for the work they perform. That's because CMS works closely with the RUC, a body of 31 physicians, and the American Medical Association — the nation's most powerful physician lobbying group — to determine and revisit reimbursements under the Medicare Physician Fee Schedule. This new study provides clarity regarding the RUC and one of the most common surgeries performed in the U.S.
Researchers from the University of Pennsylvania, UCLA and the Yale University School of Medicine authored the study. It examined 2,704 joint replacement surgeries performed at Penn Presbyterian Medical Center and Pennsylvania Hospital between January 2013 and October 2016. Ezekiel Emanuel, a special adviser for health policy to the Obama administration, was one of the co-authors.
The study concluded the actual time spent on surgery averaged 84.6 minutes for hips and 81.6 minutes for knees. The RVU allocates 100 minutes for each of the procedures. For so-called revision procedures — swaps of worn or malfunctioning replacement joints — the gap between the time allotted for payment purposes and the actual time to perform the surgery was even wider. It took 149.5 minutes on average to perform a hip revision and 134.8 minutes for a knee. The RVUs allotted are 240 minutes and 200 minutes, respectively — gaps of 61% and 48%.
The shorter durations for the surgeries had no impact on patient outcomes. Some surgeons even had below-average complication rates while working swiftly.
Indeed, the study noted that because it analyzed procedures at tertiary teaching hospitals, "RUC likely overestimated times at community hospitals and orthopedic centers even more, because these sites generally have less medically complicated patients and greater efficiencies of scale."
The study's authors criticized the RUC, which performs the lion's share of evaluating and allocating RVUs. "RUC's small size ... largely closed-door policies, and overly political processes have perpetuated unfair reimbursement levels for certain services, systemically favored proceduralists over primary care providers, and exacerbated rising healthcare costs overall," they said.
If the study's findings are embraced by the provider community, it could lead to greater acceptance of a bundled payment model for joint replacement surgeries, which is a proven money-saver for many hospitals.
This story has been updated to clarify costs of joint replacement procedures to the Medicare program.