Tuesday, May 26, 2015

GAO asks CMS for More Transparency in Determining Prices for Medicare Part B Procedure Codes

Dan Ciolek

Late last week the U.S. Government Accountability Office (GAO) published a report, mandated by the Protecting Access to Medicare Act of 2014 (PAMA), regarding the Centers for Medicare and Medicaid Services (CMS) process for developing relative value recommendations for procedures used to bill Medicare Part B. The report is called the Medicare Physician Payment Rates: Better Data and Greater Transparency Could Improve Accuracy. CMS sets payment rates for about 7,000 services primarily on the basis of the relative values assigned to each service. About 70 of these service codes are used to describe and bill for Part B therapy services. Relative values largely reflect estimates of the clinician’s work and practice expenses needed to provide one service relative to other services.

In the study, the GAO evaluated (1) the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) process for recommending relative values for CMS to consider when setting Medicare payment rates; and (2) CMS’s process for establishing relative values, including how it uses RUC recommendations. The GAO reviewed RUC and CMS documents and applicable statutes and internal control standards, analyzed RUC and CMS data for payment years 2011 through 2015, and interviewed RUC staff and CMS officials.

The GAO recommendations in the report were that:

1) CMS should better document its process for establishing relative values,

2) CMS should develop a process to inform the public of potentially misvalued services identified by the RUC, and

3) CMS should also develop a plan for using funds appropriated for the collection and use of information on these services in the determination of relative values. 

The U.S. Department of Health and Human Services (HHS), which oversees CMS agreed with two of GAO’s recommendations, but disagreed with using rulemaking to inform the public of RUC-identified services. The GAO clarified that the recommendation is not limited to rulemaking. The website to the report: http://www.gao.gov/products/GAO-15-434.

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