Health Affairs March 18, 2020
The prices of physicians’ services for 38 million beneficiaries in the traditional Medicare program are set by the federal government. The process begins with a set of relative value units (RVUs) determined by a Resource Utilization Committee (RUC) composed of physicians representing different specialties whose job is to report the amount of time or work units required to perform a wide variety of patient care tasks. Those work units, combined with practice cost and liability insurance, constitute RVUs. The RVUs are converted to dollars using a multiplier set each year by the Centers for Medicare and Medicaid Services (CMS). This price-setting process is important because private Medicare Advantage (MA) plans and commercial insurers often build their pricing systems, although not...
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