Advisory Opinion to Johnson (03-26-96)

March 26, 1996

Kirk B. Johnson, Esq.
Group Vice President
American Medical Association
515 North State Street
Chicago, Illinois 60610

Dear Mr. Johnson:

This letter responds to your request for a business review letter from the Department of Justice concerning a proposal for the American Medical Association (AMA) to disseminate to the public information relating to proposed revisions of the Medicare resource-based relative value scale. As you know, your request was transferred to the Federal Trade Commission for review.

Based on the facts presented in your request and further information provided by members of your staff, it does not appear that the proposed dissemination of information is likely to violate the antitrust laws. This opinion is based on our understanding of the facts as explained in your letter. We have not conducted an independent investigation, and our assessment could change if the facts change significantly.

Background

Your request letter explains that since 1992 the Medicare program has paid for physician services according to a resource-based relative value scale (RBRVS). The Health Care Financing Administration (HCFA) has updated the RBRVS annually, and is required by statute to review the RBRVS at least every five years. The first five-year review currently is underway. The AMA, through the process described below, has participated in each of the updates and reviews, and seeks to distribute more widely the information generated in the review process.

The RBRVS uses the procedure codes and definitions contained in the Physicians’ Current Procedural Terminology (CPT). CPT is maintained by the CPT Editorial Panel, a committee appointed by the AMA Board of Trustees. The CPT is updated annually to reflect current medical practice, and changes in the CPT necessitate annual updates to the RBRVS for the affected codes. In addition, HCFA may change the relative value of a procedure to reflect changes in the resources needed to perform the procedure, or if it concludes that a change otherwise is warranted.

In order to provide a mechanism to provide input from the physician community to the RBRVS updating process, the AMA created the American Medical Association/Specialty Society RVS Update Committee (RUC). The RUC makes recommendations to HCFA with respect to the physician work component of the relative value units contained in the RBRVS.(1) The RUC has 26 physician members, of whom 22 represent medical specialty societies. AMA and the American Osteopathic Association each appoint one voting member. The RUC Chair and a member of the CPT Editorial Panel are non-voting members of the RUC, and HCFA has sent at least one observer to each meeting.

The RUC is supported by an Advisory Committee comprised of representatives of 82 specialty societies, and a Health Care Professionals Advisory Committee with representatives from nine nonphysician health professions that are required to use the CPT to report services provided to Medicare beneficiaries and are paid based on the RBRVS.

Since the RUC was established in 1991, it has provided recommendations to HCFA in connection with four annual updates of the RBRVS. HCFA has also requested assistance from the RUC in assigning relative values to services that were not included in the original RBRVS because they are not covered by Medicare or are not commonly used for Medicare patients. Since many state Medicaid programs and other payers have adopted the RBRVS, it is important for the RBRVS to be complete with respect to all patient populations.

The RUC annual update process involves three steps: surveys of practicing physicians by the specialty societies on the RUC Advisory Committee; review of the survey results by small groups of physicians in each specialty; and review of specialty society recommendations by the full RUC. For each service being evaluated, a specialty society surveys at least 30 physicians. Based on a vignette describing a typical patient and service for the CPT code, respondents are asked to assign work values to the services in comparison to a list of reference services, to identify the services that served as key reference services in their evaluation, and to provide descriptive information about the time involved before, during, and after the service. A committee of the specialty evaluating the service reviews the surveys and other pertinent information and develops a recommendation to the RUC. The specialty society recommendations are discussed at a meeting of the full RUC. To be submitted to HCFA, recommendations must be accepted by two-thirds of RUC voting members.

The RUC’s recommendations are submitted to HCFA each year and are reviewed by panels of Medicare carrier medical directors. HCFA then proposes interim relative value units for the new and revised codes which are published for public comment. The recommendations of the RUC are published by HCFA, along with an explanation of its reason for rejecting any recommendation that is not accepted. Panels of carrier medical directors and specialty representatives convened by HCFA review the comments and develop the final relative value units. Your letter states that more than 90 per cent of the RUC’s recommendations for the 1995 RBRVS were adopted by HCFA.

HCFA has decided to work with the RUC in conducting the required five-year review of the RBRVS. In response to a request for public comment on the physician work values for all services in the 1995 fee schedule, HCFA received more that 500 comments on approximately 1,100 CPT codes. In addition, HCFA asked its carrier medical directors to identify codes that should be reviewed, particularly those that may be too high relative to other services, and the AMA conducted a study to help identify codes for which physician work may have changed. Based on its review of this and other information, HCFA referred 1,536 CPT codes to the RUC for review.

The RUC reviewed the referred codes using procedures similar to those used for the annual updates, and provided recommendations to HCFA in September 1995. HCFA will review the recommendations and publish its interim decisions on all codes in a proposed rule that will be subject to public comment. The final work values will be published as a final rule in the fall of 1996.

AMA’s Proposal

In the course of its review of the RBRVS work values in connection with both the annual updates and the five-year review, the RUC has generated a substantial volume of information that AMA believes could be valuable to third- party payers and to providers. While the relative values recommended by the RUC are made public by HCFA, the rationale and data underlying the recommendations are, for the most part, not public. AMA proposes to make available to the public the data submitted to HCFA by the RUC, including the rationales for the recommendations and the vignettes and surveys used to generate the specialty society proposed values. AMA believes this information would help physicians better understand the service described by each code and would help private payers evaluate the Medicare RBRVS and adapt it to their own use.

In particular, AMA believes that providers, payers and patients could benefit from the more complete descriptions of the services included in a particular CPT code that is contained in the RUC documents. AMA staff have told us that they receive many calls from these groups asking for interpretation of what is included in the CPT codes. In addition, the RUC materials contain comparisons of particular codes to related services in other codes, and to codes used by other specialties. Since the CPT is widely used outside of the RBRVS, AMA believes that this information will be useful to a wide range of parties. AMA contemplates making the information available in a variety of formats. It would be available to nonmembers as well as to AMA members, and fees are likely to be charged for access to the information.

AMA states that it does not intend to issue its own RBRVS. Rather, it seeks only to make public the information that is generated by the RUC in connection with HCFA’s RBRVS update process.

Discussion

AMA’s proposal to disseminate information generated by the RUC in connection with its development of recommendations to HCFA concerning the RBRVS, as described above, does not appear likely to lead to anticompetitive effects. The information primarily concerns the physician work that is encompassed in the CPT codes, and how that work compares to procedures encompassed in other codes. This information may be of value to providers, payers, and the public; consequently, wider dissemination of the information may provide procompetitive benefits.

Release by a physician organization of information relating to pricing of physician services could raise concerns under the antitrust laws if it evidenced or facilitated an agreement on prices or other terms of dealing by competing providers, or an agreement to deal with payers only on certain terms.(2) However, there is no reason to believe that such effects are likely to flow from the dissemination of the RUC information in the circumstances disclosed by this request. Indeed, since the relative values recommended by the RUC ultimately are made public by HCFA, the release of information explaining the bases for those recommendations is more likely to be procompetitive by assisting the public in evaluating the RUC’s recommendations.

Conclusion

For the reasons discussed above, AMA’s dissemination of information generated in the course of its participation in reviews of the RBRVS would not appear to violate the antitrust laws. This letter sets out the views of the staff of the Bureau of Competition, as authorized by the Commission's Rules of Practice. Under Commission Rule § 1.3(c), 16 C.F.R. § 1.3(c), the Commission is not bound by this staff opinion and reserves the right to rescind it at a later time. In addition, this office retains the right to reconsider the questions involved and, with notice to the requesting party, to rescind or revoke the opinion if implementation of the proposed program results in substantial anticompetitive effects, if the program is used for improper purposes, if facts change significantly, or if it would be in the public interest to do so.

Sincerely yours,

Robert F. Leibenluft
Assistant Director

  1. Under the Medicare physician fee schedule methodology, each physician service is assigned relative values for the physician work involved, practice overhead costs, and the costs of professional liability insurance. The amount of Medicare payment is determined by multiplying
     
  2. See, Statement of Department of Justice and Federal Trade Commission Enforcement Policy on Providers’ Collective Provision of Fee-Related Information to Purchasers of Health Care Services, Statements of Enforcement Policy and Analytical Principles Relating to Health Care and Antitrust at 48-52, 4 Trade Reg. Rep. (CCH) ¶ 13,152 (Sept. 27, 1994).