Why Primary Care Doctors Sued CMS over Its Reliance on the AMA’s RUC – and Why the RUC Should Be Changed or Replaced

Brian Klepper

Published in the February 2012 Issue of Medical Home News

Six Augusta, GA primary care physicians filed suit last August against the Centers for Medicare and Medicaid Services (CMS). They charged that for two decades the agency has relied primarily on the American Medical Association’s (AMA’s) Relative Value Scale Update Committee (RUC) to value medical services. But CMS has not required the RUC to adhere to the stringent management and reporting rules associated with the Federal Advisory Committee Act (FACA) that ensure that regulation is in the public rather than the special interest.

The RUC, a voluntary committee dominated by specialists — only two of 29 are primary care physicians –scores medical procedures in terms of Relative Value Units (RVUs). After a multiplier is applied, higher RVUs receive more reimbursement. CMS has historically accepted more than 90 percent of the RUC’s recommendations without further due diligence.

CMS has let the RUC capture the regulatory process, manipulating valuations to favor the interests of the RUC’s specialty representatives and their allies. The RUC’s meetings are closed to the public, but their outcomes decide the distribution of immense public resources. Participation is limited to representatives of certain medical societies, whose members have a direct financial stake in the results. Other important stakeholders — patients, purchasers, health economists — are excluded.

Four major problems have resulted:

• Primary care services have been under-valued, while specialty services have often been over-valued. For example, an ophthalmologist performing serial cataract extractions and intra-ocular lens implants is paid 12.5 times the hourly rate of a primary care physician conducting a moderately complex office visit (99214). The office visit is arguably more complicated.
• The payment system inhibits primary care’s moderating influence over specialty care. As primary care reimbursement has declined, so have office visit durations. This has led to increases in (often unnecessary) specialty referrals, and undermined specialty physicians’ accountability to primary care doctors.
• The lucrative reimbursement associated with many specialty procedures has created systemic incentives to provide more expensive care. As Paul Fischer, MD, the case’s lead plaintiff, has pointed out, “practicing to the codes” has harmed the professionalism of many medical specialists.
• The difference in compensation between generalists and specialists has caused a crisis-level primary care shortage. Specialists now earn $3.5 million more than family doctors, on average, over a career. Why choose a discipline that pays substantially less?

The RUC informs and gets power from fee-for-service reimbursement. But FFS’ encouragement of inappropriate care is incompatible with medical homes, thwarting approaches that strive for the right care.

One goal in bringing America’s health care system back into balance should be developing payment approaches that do not influence care. This legal challenge is the best antidote yet to a payment paradigm that, at the heart of the cost crisis, now palpably threatens the financial security of our industry and the nation. Even so, it will face fierce opposition from an entrenched health care industry. The suit and the physicians who brought it deserve the support of purchasers, patients, and primary care physicians, whose interests they seek to protect.

Brian Klepper, PhD is a health care analyst and the Chief Development Officer of WeCare TLC onsite clinics. He may be reached at bklepper@gmail.com. Read more at http://replacetheruc.org/.