 ne
of the defining moments in ASA’s history was
the development and adoption of the Relative Value
Guide (RVG). The concept originated in the California
Medical Association, and it was California’s
persistent advocacy that made the RVG a reality. The
RVG was the Society’s response to opposing and
conflicting social pressures, which required careful
thought and courageous action. The social pressure
in one direction was the demand by employers, health
insurers and a newly created federal bureaucracy to
establish uniform fees for service in order to establish
a budget. The social pressure in the opposite direction
was the Department of Justice, which considered that
any collaboration among doctors to establish fees
was a violation of antitrust law. The resulting RVG
became a prototype for all medical specialties, making
ASA a leader in American medicine.
Success and Failing
Passage of the Dependents Medicare Act (Public Law
569) by the 84th Congress in the early 1960s necessitated
the development of some sort of fee schedule for anesthetic
services in the Medicare program for military dependants,
referred to as “CHAMPUS,” the Civilian
Health and Medical Program for the Uniformed Services.
In the early 1960s, the ASA House of Delegates heard
the details of the system adopted by the California
Medical Association that would establish a Relative
Value System (RVS), which would be the same throughout
the state. Each surgical procedure was assigned a
numeric unit value based on four evaluations: anesthesia
risk, surgical problems related to anesthesia, skill
required and time required. Different dollar amounts
could be assigned to the units depending on the cost
of living in an area. For example a higher value was
assigned to the unit in San Francisco compared to
Modesto. Commercial insurance companies also looked
closely at California’s new relative value system.
They wanted a yardstick, something concrete and uniform
that could be readily converted into dollars and cents
in order to plan a prospective budget and fix a premium
for a health insurance policy.
The genius who devised and developed the concept of
the RVS was an anesthesiologist from Los Angeles named
Joseph H. Failing, M.D. Beginning in the early 1950s,
he devoted seven years of his personal time, money
and energy to perfect the concept and guide it through
the California Society of Anesthesiologists and the
California Medical Association. Having achieved those
goals, he introduced the concept to ASA.
Red HOD Debate About RVG
In the early 1960s, the debate over the RVG in the
ASA House of Delegates was very intense. Those opposed
to planning and implementing a national RVG claimed
that this was a step toward socialized medicine. Those
in favor felt that an RVG would help anesthesiologists
establish and collect reasonable fees and that opponents
were “dragging their feet.” Proponents
also favored assisting governmental agencies and insurance
companies to do their jobs in an efficient manner.
Even those who were unified in favor of an RVG were
divided concerning the details. Some favored time-based
units; others favored “usual, customary and
reasonable,” or UCR, fees.
Keeping in mind that a UCR survey for all physicians
was being conducted on a national basis, ASA considered
taking the initiative to formulate an acceptable fee
schedule “to prevent one formulated by a third
party being forced upon us.” Surgeons, internists
and most other medical practitioners were debating
the adoption of UCR schedules. Because anesthesiologists
wished to be treated like other doctors, the argument
to adopt a UCR schedule was strong. In 1961 the House
of Delegates passed a resolution to the effect that
fees in prepayment plans should be determined on the
basis of a prevailing fee for a procedure, referred
to as a UCR with provision for extra compensation
for cases of unusual difficulty. Notice of this action
was distributed to the insurance industry, Blue Shield
Association and the American Medical Association and
their respective constituent groups with surprisingly
very little response from those groups or from the
Society’s membership.
RVG Goes Public
Anesthesiologists who did not want to be penalized
because they worked with slow surgeons put forward
the most powerful argument against UCR fees. They
felt that a unit linked to time would compensate for
a slow surgeon and would not be a financial disadvantage
for the anesthesiologist. After a year of debate in
the caucuses, the 1962 House of Delegates formally
adopted a Relative Value Guide based on units of time
for anesthesiology. Emphasis was placed on the fact
that this was a guide, not an official fee schedule.
Members could choose to use the UCR system or not.
This RVG was the first guide adopted by any specialty
on a national basis. All members were polled as to
the use of the guide in their individual areas. Responses
were mixed. Some were of the opinion that its use
was limited while others were enthusiastic about its
usefulness. Complaints and requests for changes in
points for specific items were few indeed, however.
Also no requests for aid concerning specific fees
were received either from anesthesiologists or third-party
payers, which suggested that the RVG had satisfied
the requirements of anesthesiologists and third-party
payers alike. Compliments in letters and telephone
calls thanked the Society for offering such a guide
for reference purposes.
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| The first Relative Value
Guide in 1962 was a book of stapled mimeographed
sheets. The cover is pictured above. (Image
courtesy of the Wood Library-Museum of Anesthesiology) |
Guide Grows Up
The second edition of the RVG appeared in 1967 as
a slick paper publication that sold thousands of
copies. Many changes were made to this edition,
and each component society was urged to develop
its own adaptation to the guide and to help to establish
the value of the units. The Committee on Economics
recommended that relative values for supervision
of nurse anesthetists be developed at a local level
with a suggestion by the President that the relative
value for supervision of two simultaneous anesthetics
be 50 percent of regular value.
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| The second edition of the
Relative Value Guide appeared in 1967 as a slick
paper publication that sold thousands of copies.
(Image courtesy of the Wood Library-Museum of
Anesthesiology) |
Legal Battles
Several medical societies followed this lead and
published their own relative value guides. These
included the American College of Obstetricians and
Gynecologists, the American College of Radiology,
the Illinois Podiatric Society and the American
Dental Association. All of these organizations,
including the California Medical Association and
ASA, came under broad attack by the Federal Trade
Commission, which alleged that they represented
conspiracies to fix prices for medical services.
In time all of the named associations, except ASA,
agreed in consent orders to cease publication of
their guides. ASA was left alone to face the Justice
Department, which brought suit in 1975, alleging
violations of the price-fixing prohibitions of the
Sherman Antitrust Act.
Based on advice of its legal counsel, John Lansdale,
Esq., ASA decided to fight the allegations. Jess
B. Weiss, M.D., 1979 ASA President, testified on
behalf of ASA at the trial, which lasted six days.
New York District Court Judge Kevin T. Duffy issued
his 40-page decision, which concluded that the RVG
did not violate antitrust laws. ASA had faced the
Department of Justice in court and had prevailed;
the legality of the RVG had been dramatically established
for anesthesiologists and all of medicine.
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| Joseph H. Failing, M.D.,
(left) receives the Distinguished Service Award
from President Nicholas G. DePiero, M.D., in
1969. Image reprinted with permission of
the ASA NEWSLETTER. 1967; 31(11): 4. |
The Gold Standard
In December 1989, President George H. Bush signed
the Omnibus Budget Reconciliation Act establishing
a physician payment schedule based on a Resource-Based
Relative Value Scale. In 1992 the American Medical
Association established an advisory committee named
the RVS Update Committee, or RUC, to establish equity
across specialties for the value of units. Dr. Failing’s
brainchild had now become the national standard
for medical payments.
Dr. Failing was a contributor to many ASA programs
in addition to his monumental work in developing
and promoting the RVG. In recognition of his career-long
dedication to the goals of ASA, he was awarded the
Distinguished Service Award in 1969.
The RVG stands as a tribute to the genius of Dr.
Failing and to the foresight, maturity and leadership
of ASA. Thankfully the leadership, which was so
apparent then, is still evident today, and the future
of ASA is bright.
Bibliiography:
Belton MK. What is the DSA? Joseph H. Failing, M.D.,
California’s choice for ASA Distinguished
Service Award. California Society of Anesthesiologists
Bulletin. 1966; 15(3):4-6.
Death takes Joseph H. Failing, M.D., 1966 Distinguished
Service Award recipient. ASA Newsl. 1974; 38(12):3.
DePiero NG. Fee scheduling. ASA Newsl. 1966; 30(7):1,3.
Failing JH. Anesthesia fees. Anesthesiology. 1957;18:344-348.
Honor Dr. Failing with Distinguished Service Award.
ASA Newsl. 1967; 31(11):4.
Joseph H. Failing M.D. 1899-1974. California Society
of Anesthesiologists Bulletin. 1974; 23(5): 4-5.
Minutes of the ASA House of Delegates and Board
of Directors meetings from 1957 to 1967, on file
at the Wood Library-Museum of Anesthesiology, Park
Ridge, IL.
Weiss JB. ASA Antitrust Suit 1975-1979: United States
of America (Plaintiff) v. American Society of Anesthesiologists,
Inc. (Defendant). ASA Newsl. 2000; 64(9):21-22.
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Babatunde O. Ogunnaike, M.D., is Assistant Professor
of Anesthesiology and Pain Management, University
of Texas Southwestern Medical School, Dallas,
Texas. |
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Adolph H. Giesecke, M.D., is Professor of Anesthesiology
and Pain Management, former Jenkins Professor
and Chair, University of Texas Southwestern
Medical School, Dallas, Texas. He is a former
Wood Library-Museum of Anesthesiology Trustee. |
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