A Letter From America’s Medical Specialty Societies To Rep. McDermott (D-WA)

Brian’s Note: This letter, signed by 47 medical specialty societies, was sent Wednesday to Rep. Jim McDermott (D-WA), in response to his remarks before the House Ways & Means Committee, and to legislation he recently introduced, H.R. 1256, the Medicare Physician Payment Transparency and Assessment Act, that would require the Relative Value Scale Update Committee’s (RUC’s) recommendations to be validated using means that are external to the RUC.

This letter, representing virtually the entire medical specialty community, is a remarkable display of mobilized discipline and influence over a seemingly minor bill. Note that the arguments in it echo those made last week by Barbara Levy, MD, the RUC’s Chair, in an article published on Kaiser Health News (which I responded to here). It is also similar to a letter – see here – sent Tuesday by AMA CEO Michael Maves.

More on this shortly.

April 6, 2011

 

The Honorable Jim McDermott

U.S. House of Representatives

1035 Longworth House Office Building

Washington, D.C. 20515

 

Dear Rep. McDermott:

On behalf of our physician members who care for the full range of patient needs, the undersigned organizations write to respond to comments made during the March 15, 2011 hearing before the Ways and Means Subcommittee on Health to discuss the Medicare Payment Advisory Commission (MedPAC) March 2011 Report to the Congress: Medicare Payment Policy and to share concerns regarding the “Medicare Physician Payment Transparency and Assessment Act”, recently introduced by Representative Jim McDermott. Specifically, we want to address the apparent misconceptions about the composition and role of the American Medical Association’s Relative Value Update Committee (RUC).

The RUC is a multispecialty physician expert panel convened by the AMA with the support and cooperation of the physician and health care practitioner specialty societies who petition the government to provide a fair and equitable system of reimbursement for physician services. In addition to annual updates reflecting changes in Current Procedural Terminology (CPT), Section 1848(C)2(B) of the Omnibus Budget Reconciliation Act of 1990 requires the Centers for Medicare and Medicaid Services (CMS) to comprehensively review all relative values at least every five years and make any needed adjustments. The success of the RUC’s role in the annual updates led CMS to seek assistance from the RUC for each of the three Five-Year-Review processes. CMS participates in every RUC meeting. After each review is completed, the Secretary of Health and Human Services and CMS review the RUC’s recommendations and will then accept, modify, or reject any of the recommendations.

Given the Secretary and CMS’ current authority to alter any recommendations made by the RUC and their unsuccessful prior attempts at using contractors, we believe the concerns raised by Subcommittee members are unfounded and the legislation introduced by Representative McDermott is unnecessary. In the late 1990s, CMS used a contractor to develop practice expense inputs for all physician services and when the process failed, the RUC stepped in to develop a new process with uniform standards and re-reviewed every service and cost input resulting in the redistribution of practice expense payments to primary care.  Another CMS contractor hired to obtain the overall practice costs of each specialty could not fulfill its contract and, in 2007, CMS relied on the AMA and national specialty societies to collect the cost information. In addition, the RUC assumed the activity of identifying potentially misvalued codes, when CMS, using contractors, failed in its attempt. To date, the RUC has identified more than 900 services and redistributed more than $1.5 billion.

One of the common criticisms of the RUC has been a purported bias to non-primary care specialties. However, it is important to note that the RUC does not review “primary care” or any specific specialty in terms of relative value. Rather, it reviews the relative value of individual services that physicians perform – regardless of specialty. Even as Medicare payments for many physician services have steadily declined over the past two decades, the RUC has taken significant steps to improve reimbursement for services that are performed by primary care including:

• The RUC review of services in 1995, which included recommended increases for evaluation and management services, resulted in a shift of $2.7 billion and net increases for family practice and internal medicine of 2.0 percent to 2.5 percent. Surgical specialties saw net decreases ranging from 1.0 percent to 5.5 percent.
• The third five-year review of work in 2005 resulted in the shifting of more than $4 billion to evaluation and management (E & M) codes—which are largely provided by primary care practitioners—from other physician services in the 2007 Medicare Physician Fee Schedule (MPFS).
• The third five-year review also resulted in a 37 percent increase in the work values associated with an intermediate office visit (CPT 99213), the most frequently billed Medicare physician service for family practice and internal medicine physicians.
• Between 2006 and 2011, while Medicare payments for many physician services were reduced from 2006 levels for non-primary care physicians, Medicare payments to primary care have increased by 22.5 percent according to MedPAC’s most recent report.
• Of the 22.5 percent increase to primary care, only 2.9 percent of that increase resulted from annual Medicare payment updates, while 19.6 percentage points were a result of the recommendations made by the RUC. This includes increases in preventive services such as the increase in immunization administration.

In addition, we firmly believe that the RUC has provided a reasonable venue in which the primary care community has successfully participated in discussions of the needs of the primary care community and what would best serve the interests of patients. Of note, each time a primary care organization has asked the RUC to assist and evaluate their requests, the RUC has, with few exceptions, provided the changes. For example:

• While not yet implemented by CMS, in addition to the 22.5 percent increase (of which non-primary care physicians have been deprived), the RUC has valued medical home payment.
• The RUC provided a value for observational care which is principally provided by primary care.
• The RUC has also valued telephone and team management services.

While no payment process is flawless, our organizations strongly believe the RUC exists to provide relative valuation of medical services. No other entity has the expertise to decide if a service provided is relatively more complex, relatively more intense, or relatively more risky than the collective deliberative panel of the RUC.

Some, including MedPAC, have suggested an additional RUC-like panel, which would include economists and lay-persons in addition to physicians, to make recommendations regarding particular physician services that are perceived to be overvalued. We question the value of creating another panel and argue that this would not only be duplicative, but would add yet another bureaucratic layer to an already complicated process. In addition, the Secretary and CMS already enjoy considerable authority regarding the recommendations issued by the RUC and currently have the authority and ability to obtain input from economists and other individuals.

The strength of the RUC is that the committee is convened by and comprised of physicians with additional representation by non-physician health care practitioners. Our members and our organizations are dedicated to improving the quality of outcomes for patients, and our numerous efforts through the AMA Physician Consortium for Performance Improvement (PCPI), physician-led databases and registries, and other quality initiatives are bearing fruit and improving outcomes for patients of all ages. With the authority that the Secretary and CMS already possess to alter the RUC’s recommendations, we believe that the inclusion of additional purported experts, who are unfamiliar with clinical practice and the potential implications for patients, would only undermine a process that is, in our estimation, the best available for the reasons cited above.

We greatly appreciate your dedication to the challenges facing America’s physicians and the health of all Americans and believe that finding physician-led solutions in Medicare and beyond are essential. We are confident that the Relative Value Update Committee has not only shown the ability to face these challenges, but understands the relative value of all physician services, including those of our esteemed primary care colleagues, for whom the RUC has shown consistent support.

As you consider solutions to improve Medicare’s payment system, please know that we continue to work diligently to not only increase the quality and value of the care our patients receive, but to find meaningful and lasting policy solutions that will not only maintain but improve Americans’ access to quality care as well.

Sincerely,

American Academy of Dermatology Association

American Academy of Facial Plastic and Reconstructive Surgery

American Academy of Ophthalmology

American Academy of Otolaryngology-Head and Neck Surgery

American Academy of Physical Medicine and Rehabilitation

American Association of Clinical Endocrinologists

American Association of Clinical Urologists

American Association of Neurological Surgeons

American Association of Orthopaedic Surgeons

American College of Cardiology

American College of Emergency Physicians

American College of Gastroenterology

American College of Osteopathic Surgeons

American College of Radiology

American College of Surgeons

American Congress of Obstetricians and Gynecologists

American Gastroenterological Association

American Osteopathic Academy of Orthopedics

American Osteopathic Association

American Pediatric Surgical Association

American Psychiatric Association

American Society for Clinical Pathology

American Society for Gastrointestinal Endoscopy

American Society for Metabolic and Bariatric Surgery

American Society for Radiation Oncology

American Society for Surgery of the Hand

American Society of Anesthesiologists

American Society of Breast Surgeons

American Society of Cataract and Refractive Surgery

American Society of Colon and Rectal Surgeons

American Society of General Surgeons

American Society of Neuroradiology

American Society of Nuclear Cardiology

American Society of Plastic Surgeons

American Thoracic Society

American Urological Association

College of American Pathologists

Congress of Neurological Surgeons

Heart Rhythm Society

Infectious Diseases Society of America

North American Spine Society

Society for Cardiovascular Angiography and Interventions

Society for Vascular Surgery

Society of American Gastrointestinal and Endoscopic Surgeons

Society of Gynecologic Oncology

Society of Interventional Radiology

The Society of Thoracic Surgeons