New Medicare price review panel proposed

Physicians urge caution over MedPAC's ideas for changing the review process for medical service values but embrace its call for an overall 2.8% Medicare raise.

By David Glendinning, AMNews staff. March 20, 2006.

Washington -- When it comes to advice federal officials receive from physicians on how much to pay for individual medical services, Medicare advisers recommend seeking a second opinion.

The Medicare Payment Advisory Commission called on the Centers for Medicare & Medicaid Services to establish an expert panel to help identify physician services overvalued by the government. CMS receives its only advice on how to weight individual services from the American Medical Association's Relative Value Scale Update Committee, or RUC. The panel consists of practicing physicians representing a broad range of medical specialties.

The committee conducts a major review of Medicare services every five years to determine which should be assigned different weights. A newer, more complex procedure, for example, might need a relatively higher rate to start, because it takes physicians more time to complete. But once the procedure has become more common in doctors' offices, the rate might need to come down to reflect the lessened drain on physicians' time and resources.

The problem is the specialists on the RUC more readily highlight services for which Medicare pays too little than those for which the program pays too much, MedPAC said in its annual March report to Congress. The document calls into question the complex system federal officials use to try to pay physicians fairly for the more than 7,000 individual services they provide to Medicare beneficiaries.