Recently, there were a couple of breathless articles about the RUC (Relative Value Scale Update Committee) published in The Washington Post and The Washington Monthly, reporting as news the state of affairs that has prevailed for years in the realm of re-setting the relative values of physician services annually for purposes of the RBRVS — which is at the heart of the Medicare Physician Fee Schedule (MPFS) and which affects physician reimbursement well beyond Medicare, since the RBRVS is used as a touchstone in determining payment levels under commercial payor agreements as well.
As detailed in our conversation, the RUC is a committee of the American Medical Association, and it operates behind a veil of secrecy. When it issues its annual update recommendations, CMS generally accepts the recommendation, and promulgates the update as a rule: the annual MPFS rule. The RUC is dominated by specialists, so the system tends to overvalue procedures and to undervalue “cognitive” services, or primary care.
“One of the biggest mistakes we made … is that we took the RUC … back in 1992 and gave it to the AMA. … It’s incredibly political, and it’s just human nature…the specialists that spend more money and have more time have a bigger impact.”
This was Tom Scully, former Bush II Administrator of the Centers for Medicare and Medicaid Services (CMS), previously the Health Care Finance Administration (HCFA). He was a panelist in a May 10, 2012 Senate Finance Committee RoundTable discussion by former HCFA/CMS Administrators and has become one of the RUC’s most outspoken critics. He was explaining how the American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC), a group that asked if it could help the government by overseeing a valuation process for medical services, came to dominate and distort the pricing used in Medicare, Medicaid and commercial health plans.
“The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild. … Having the AMA run the process of fixing prices for Medicare was crazy from the beginning.”
Gail Wilensky, HCFA Administrator under Bush I, was wistful. “It happened innocently enough.”
It is remarkable and compelling to hear these federal health program ex-stewards express regret about a fiasco they had a hand in. Their “mea culpas” are almost palpable. Mr. Scully, in a recent Washington Post video interview, gave a quick aside, “It’s partially my fault.”
If primary care physicians have a bigger enemy than the RUC, Brian Klepper, PhD, hasn’t heard about it.
The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is a 31-physician panel that wields enormous influence with the Centers for Medicare & Medicaid Services (CMS) in setting the relative values of medical procedures, which are then used to determine reimbursement levels. CMS has historically accepted about 90% of the panel’s recommendations.
On January 7, a federal appeals court rejected six Georgia primary care physicians’ (PCPs) challenge to the Centers for Medicare and Medicaid Services’ (CMS) 20-year, sole-source relationship with the secretive, specialist-dominated federal advisory committee that determines the relative value of medical services. The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is, in the court’s view, not subject to the public interest rules that govern other federal advisory groups. Like the district court ruling before it, the decision dismissed the plaintiffs’ claims out of hand and on procedural grounds, with almost no discussion of content or merit.
Thus ends the latest attempt to dislodge what is perhaps the most blatantly corrosive mechanism of US health care finance, a star-chamber of powerful interests that, complicit with federal regulators, spins Medicare reimbursement to the industry’s advantage and facilitates payment levels that are followed by much of health care’s commercial sector. Most important, this new legal opinion affirms that the health industry’s grip on US health care policy and practice is all but unshakable and unaccountable, and it appears to have co-opted the reach of law.
Posted 8/29/12 on Medscape Connect’s Care and Cost Blog
Dr. George Lundberg has an important article on Medpage Today that deserves the thoughtful consideration of every American physician. He argues that the American Medical Association, a successful and representative organization for many decades, more recently “fails on both fronts” to fight for doctors and for the health of the American people. It has become, he says, “unsalvageable.”
In a companion piece earlier this month, he called on all physicians to become lifelong members of the AMA, as a way to gain professional impact and to make the AMA more reflective of American physicians’ concerns. “If you are an American physician and you don’t like what the AMA has done and is doing, if you are not a member, shut your mouth, you have no right to complain.”
On May 9th, William Nickerson, Senior Judge in the Southern Maryland Federal District Court, issued a 15 page ruling against the six Augusta, GA primary care physician plaintiffs who challenged HHS’ and CMS’ longstanding relationship with the American Medical Association’s Relative Value Scale Update Committee (RUC). The opinion did not weigh the substance of the case, but instead focused on a procedural provision in which Congress bars the judicial system from considering how the relative value units (RVUs) of medical services are determined. Judge Nickerson wrote:
Accepting as true that RUC plays a major role in the formation of the PFS [Physician Fee Schedule] and also accepting as true that this role unfairly skews the PFS toward certain medical professions and procedures, the Court, nonetheless, finds that Congress has precluded courts from reviewing, not only the final relative values and RVUs, but also the method by which those values and units are generated.
Brian’s Note: Last week David Kibbe and I posted a Health Affairs Blog column, Trusting Government: A Tale of Two Federal Advisory Groups, that compared the openness and transparency of the Health Information Technology Policy Committee (HITPC) and the AMA’s RVS Update Committee (RUC), as a way of showing how the behaviors of each engender public trust or distrust in government. HITPC, a Federal Advisory Committee, advises the Office of the National Coordinator for Health Information Technology (ONC) on matters pertaining to the ARRA/HITECH legislation. The RUC has been CMS’ sole advisor for two decades on the value of medical services. As regular readers know, over the past year, we have been highly critical of CMS’ inappropriate reliance on the RUC, and believe this relationship has been a key driver of excessive health care cost.
Americans increasingly distrust what they perceive as poorly run and conflicted government. Yet rarely can we see far enough inside the federal apparatus to examine what works and what doesn’t, or to inspect how good and bad decisions come to pass. Comparing the behaviors of two influential federal advisory bodies provides valuable lessons about how the mechanisms that drive government decisions can instill or diminish public trust.
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.
Whither CMS? That’s the issue raised by Brian Klepper and David Kibbe in their post on the Health Affairs website this morning. The Center for Medicare and Medicaid Services faces a November deadline for answering a complaint by six Georgia physicians that claims the American Medical Association’s Relative Value Scale Update Committee (RUC) violates the Federal Advisory Committee Act. The RUC periodically sends recommendations to CMS on how it should reimburse different physician services. As Klepper and Kibbe point out, this specialist-dominated committee, after what are the medical equivalent the early 20th century factory efficiency studies conducted by Frederick Winslow Taylor, decides that the value of cataract surgery, for instance, is 12.5 times the value of a primary care office visit.
The little-known American Medical Association committee that recommends physician pay scales to Medicare’s fee-for-service program today asked the agency to reimburse physicians for coordinating care for their chronically-ill patients. In a letter to administrator Donald Berwick, the Relative Value Scale Update Committee (better known as the RUC) recommended the Center for Medicare and Medicaid Services pay for phone calls, counseling sessions and other services that help their patients wend their way through the complicated health care system.
Good idea, and long overdue. But what I didn’t see in the letter from RUC committee chairwoman Barbara Levy was any reference for how to pay for these new services. How about a reduction in the “relative value” of back surgery or conducting angioplasty on patients complaining of persistent chest pains? These are among the most expensive and overused procedures in medicine, incentivized by the extraordinarily high fees earned by the surgeons who do them. These surgeons often earn two or three times what primary care physicians earn.
My typical Medicare patient expects me to deal with 5 or more problems in a single routine visit. There are usually around 3 old ones (e.g., diabetes, hypertension, hyperlipidemia) and at least 2 new ones (e.g., low back pain, fatigue). For those who come with handwritten lists, there may be as many as 10, including every health question that has come to mind over the past 6 months (Should I take a holiday off of Fosamax? Should I add fish oil? Do I need another colonoscopy? Is the shingles shot any good?).
Physicians who do procedures get paid for each one done to a single patient on a particular day. Medicare’s rule for this – the Multiple Procedure Payment Reduction Rule (MPPR) – says doctors should be paid 100% for the first procedure and 50% for each subsequent procedure up to 5. However, for those of us whose work is primarily cognitive rather than procedural, there is an important exclusion: the multiple-payment rule does not apply to E/M codes. In fact, the definitions of 99213 and 99214 unambiguously state, “Usually the presenting problem(s) are of . . . complexity.” Note the “(s)”! It clearly creates a double standard that favors doing procedures and places thoughtful solving of patients’ problems at a disadvantage.
Last Thursday Anna Wilde Mathews of the Wall Street Journal ran an article detailing the activities surrounding primary care’s gradual awakening and mobilization. With Tom McGinty, Ms. Mathews authored a damning expose on the RUC last October that precipitated our efforts on against CMS’ 20 year reliance on the AMA’s RVS Update Committee (RUC) for valuation of medical services.
Everyone in medicine knows that some physicians are overpaid for the services they provide and some are underpaid. The list of specialties in each category is no secret, though we don’t talk about it much. It’s part of the same ethic that teaches us not to criticize another doctor’s care.
But the sad fact is that in medicine, money is tied to prestige, power, public credibility, and medical student interest. If we don’t deal with this problem, medicine will continue to fall hopelessly into the “haves” and the “have nots,” that is, those who “own” lucrative CPTcodes and those who don’t. So the question is how did this inequity come to be and how can it be remedied?
The Washington Post reports that the Affordable Care Act’s Independent Payment Advisory Board, intended to constrain Medicare spending increases, is under increasing pressure from Republicans, health care lobbyists—and a significant number of Democrats.
As specified by the ACA, the IPAB will consist of fifteen health care “experts” to be appointed by the president and confirmed by the Senate, with authority to make cuts to Medicare if spending exceeds specified targets, starting in 2015. Congress could overrule the panel, but only by mustering a super-majority in the Senate or by creating an alternate plan to save the same amount.