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Do You Know How RUC Is Affecting Your Income?

Do You Know How RUC Is Affecting Your Income?


Right now the RUC is in the midst of a critical five-year review of codes that could result in changes in how much psychiatrists and other physicians are paid by Medicare (and by extension by some private insurers). As part of this process, APA has been conducting a survey of “relative work values”—the component of the Medicare payment formula that places a value on procedures performed by clinicians, based on the intensity of work involved in those procedures compared with other medical procedures (see APA Urges Psychiatric Code Changes). So what exactly does the RUC do? To answer that, a little history is in order.Prior to 1989, the government paid physicians in the Medicare program according to their “usual and customary” fees. But to the federal government, working with fixed tax dollars, a usual and customary fee was bound to be an arbitrary one, subject to manipulation and unrelated to the “rational” variables that typically determine price in a market system. So that year the government adopted the Resource-Based Relative Value Scale (RBRVS), developed by Harvard economist William Hsaio, Ph.D., the goal of which was to assign something approximating a rational value to the services physicians provide to
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