Strengthening RVUs, Understanding the RUC
The Academy helps advise CMS on the relative value units (RVUs) that influence ophthalmology’s Medicare payments. This happens through participation in the American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee (RUC).
The Academy helps advise the Centers for Medicare & Medicaid Services (CMS) on the relative value units (RVUs) that influence ophthalmology’s Medicare payments. This happens through participation in the American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee (RUC).
The AMA/RUC is an expert panel of physicians that makes recommendations to the federal government on the resources required to provide medical services. The RUC considers physicians' work — including the time and intensity associated with a service — as well as clinical staff time, medical supplies, medical equipment, and professional liability insurance associated with performing a service. Those recommendations support the RVUs that underpin the Medicare Physician Fee Schedule and are widely adopted by Medicaid and private payers as well.
The American Academy of Ophthalmology has participated in the RUC process since the committee's formation, supporting accurate, evidence-based valuation of the medical and surgical services that ophthalmologists provide.
History of the RUC
The RUC was convened by the AMA in 1991 in anticipation of Medicare's 1992 adoption of a standardized physician payment schedule based on a resource-based relative value scale (RBRVS). This new payment system significantly changed how Medicare pays for physician services, no longer basing payments on charges. This created the need for an ongoing mechanism to keep relative values current as medical practice evolved. So the AMA formulated the RUC as a volunteer, multispecialty body to give medicine a voice in shaping Medicare relative values.
Today, the RUC provides CMS with current, clinically informed recommendations on the relative resources required to provide physician services. The RUC works closely and in tandem with the CPT Editorial Panel. It reviews new and revised CPT codes, identifies potentially misvalued services, and maintains the underlying data on physician work and practice expense that CMS uses to set RVUs.
The RUC is an independent group of volunteer physicians exercising its First Amendment right to petition the federal government. CMS considers each recommendation and makes all final decisions on the relative values that appear in the Medicare Physician Fee Schedule.
Understanding the Resource-Based Relative Value Scale (RBRVS)
In the RBRVS system, payments for services are determined by the resource costs needed to provide them. The cost of providing each service is divided into three components: physician work, practice expense, and professional liability insurance (PLI). Payments are calculated by multiplying the combined costs of a service by a conversion factor — a monetary amount determined annually by the CMS. Payments are also adjusted for geographical differences in resource costs.
The physician work component accounts for an average of 50.9% of the total relative value for each service. Factors used to determine physician work include the time it takes to perform the service; the technical skill and physical effort required; the mental effort and judgment involved; and stress due to the potential risk to the patient.
The practice expense component accounts for an average of 44.8% of the total relative value for each service. Practice expense relative values represent the clinical staff time, medical supplies, and medical equipment associated with a service.
The professional liability insurance (PLI) component accounts for an average of 4.3% of the total relative value for each service. Costs are driven by the professional liability insurance premiums of the specialties that perform a service and the risk of the service. When determining PLI RVUs, the physician work RVU is the primary factor used to assess the risk associated with the service.
Who Serves on the RUC?
Members
The RUC represents the entire medical profession, with 22 of its 32 members appointed by major national medical specialty societies — including those recognized by the American Board of Medical Specialties, those with a large percentage of physicians in patient care, and those that account for high percentages of Medicare expenditures. Ophthalmology holds one permanent seat on the RUC.
Each member has one vote, and a recommendation must be approved by at least two-thirds of sitting members before it can be transmitted to CMS — a high threshold that ensures broad cross-specialty consensus. RUC members do not serve as advocates for their own specialty; their role is to evaluate the survey data and recommendations presented to the committee on the merits and to act in the interest of an accurate, consistent valuation process across all of medicine.
Advisors
Supporting the RUC is the Advisory Committee, composed of over 300 physicians appointed by each national medical specialty society seated in the AMA House of Delegates — including the American Academy of Ophthalmology. Advisors and their alternates do not hold a vote on the RUC, but they generate relative value recommendations using a survey method developed by the RUC. Specialty society advisors attend RUC meetings and present their societies' recommendations for the committee to evaluate.
Unlike RUC members, Advisory Committee members serve as the voice of their specialty — it is through this committee that ophthalmology's clinical expertise and perspective are brought into the valuation process.
Ophthalmology
Ophthalmology holds a permanent seat on the RUC, and our member and alternate participate in meetings three times per year. The Academy's RUC advisor and alternate advisor — supported by Academy staff — lead our engagement on every code that affects ophthalmic practice. This includes fielding member surveys, building work and practice expense recommendations, and presenting them to the RUC members. When a code is performed by physicians across multiple specialties, the Academy coordinates with other specialty and subspecialty societies on a consensus recommendation.
Learn More
Direct questions about the RUC process to healthpolicy@aao.org. Learn more about the RUC process: