How Is Physician Work Valued?

Jeffrey P. Jacobs, Stephen J. Lahey, Francis C. Nichols, James M. Levett, George Gilbert Johnston, Richard K. Freeman, James D. St. Louis, Julie Painter, Courtney Yohe, Cameron D. Wright, Kirk R. Kanter, John E. Mayer, Keith S. Naunheim, Jeffrey B. Rich, Joseph E. Bavaria

Research output: Contribution to journalArticlepeer-review

55 Scopus citations


Strategies to value physician work continue to evolve. The Society of Thoracic Surgeons and The Society of Thoracic Surgeons National Database have an increasingly important role in this evolution. An understanding of the Current Procedural Terminology (CPT) system (American Medical Association [AMA], Chicago, IL) and the Relative Value Scale Update Committee (RUC) is necessary to comprehend how physician work is valued. In 1965, with the dawn of increasingly complex medical care, immense innovation, and the rollout of Medicare, the need for a common language describing medical services and procedures was recognized as being of critical importance. In 1966, the AMA, in cooperation with multiple major medical specialty societies, developed the CPT system, which is a coding system for the description of medical procedures and medical services. The RUC was created by the AMA in response to the passage of the Omnibus Budget Reconciliation Act of 1989, legislation of the United States of America Federal government that mandated that the Centers for Medicare & Medicaid Services adopt a relative value methodology for Medicare physician payment. The role of the RUC is to develop relative value recommendations for the Centers for Medicare & Medicaid Services. These recommendations include relative value recommendations for new procedures or services and also updates to relative value recommendations for previously valued procedures or services. These recommendations pertain to all physician work delivered to Medicare beneficiaries and propose relative values for all physician services, including updates to those based on the original resource-based relative value scale developed by Hsaio and colleagues. In so doing, widely differing work and services provided can be reviewed and comparisons of their relative value (to each other) can be established. The resource-based relative value scale assigns value to physician services using relative value units (RVUs), which consist of three components: work RVU, practice expense RVU, and malpractice RVU, also known as professional liability insurance RVU. The Centers for Medicare & Medicaid Services retains the final decision-making authority on the RVUs associated with each procedure or service. The purpose of this article is to discuss the role that the CPT codes and the RUC play in the valuation of physician work and to provide an example of how the methodology for valuation of physician work continues to evolve.

Original languageEnglish (US)
Pages (from-to)373-380
Number of pages8
JournalAnnals of Thoracic Surgery
Issue number2
StatePublished - Feb 1 2017
Externally publishedYes

ASJC Scopus subject areas

  • Surgery
  • Pulmonary and Respiratory Medicine
  • Cardiology and Cardiovascular Medicine


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