American Academy of Orthopaedic Surgeons

The Federal Trade Commission has granted a petition from the American Academy of Orthopaedic Surgeons (AAOS) to set aside a 1976 consent order that prohibited AAOS from initiating, pub- lishing or circulating "relative value scales" for medical or surgical procedures. The Commission's action ends the restric- tion against AAOS providing relative value scale information to its members and other non-governmental entities.

AAOS is based in Rosemont, Illinois. In December 1994, it petitioned the FTC to reopen and modify or rescind the 1976 order, which settled charges that the Academy's preparation and distribution of relative value scales (RVS) effectively estab- lished or maintained the fees charged by orthopaedic surgeons for their services. An RVS assigns numerical values to different medical and surgical procedures, and these values can be con- verted into fees by applying a dollar conversion factor. AAOS sought Commission action to allow it to sponsor and disseminate research projects that analyze various components of resource- based relative value scales for physician reimbursement under Medicare.

In 1989, Congress mandated a change in the method used to determine physician reimbursement under Medicare. It replaced the "customary, prevailing, and reasonable" rate method with a resource-based RVS (RBRVS) method. Since then, the Department of Health and Human Services and other entities have continued to seek information about the physician work component of this method from medical societies. This component is the subject of the Abt Restudy, which was commissioned by AAOS to respond to perceived shortcomings in the Medicare RBRVS for orthopaedic services.

The Commission said that the reimbursement method change warrants granting the request of AAOS to reopen and set aside the order so as to allow AAOS to circulate the Abt Restudy and other

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AAOS--05/05/95)

RVS information to third-party payers, its members (in part, so that they can provide data to state governmental bodies), and other non-governmental entities involved in influencing health care policy and physician reimbursement. The Commission said in particular that, if the order were continued, AAOS's inability to disseminate the relevant infor- mation to other medical professional societies may hinder their ability to assist the government in identifying information relevant to revising Medicare RBRVS, and increase the govern- ment's cost in obtaining such information. Similarly, prohi- biting distribution of the information to AAOS members may hinder their ability to contribute to the development of RBRVS and health policy at the state government level, the FTC said.

The Commission cautioned, however, that setting aside the order "should not be construed as approval for use by AAOS or its members of a relative value guide as a basis for unlawful agreement on price."

The Commission vote to reopen and set aside the order was 5-0.

Copies of the Commission order reopening and setting aside the 1976 order, the 1976 order itself, and the December petition are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(Docket No. C-2856)