A Legal Challenge to CMS’ Reliance on the RUC

Brian Klepper and David C. Kibbe

First posted 8/09/11 on The Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

This week in a Maryland federal court, six physicians based at the Center for Primary Care in Augusta, GA filed suit against HHS Secretary Kathleen Sebelius and CMS Administrator Donald Berwick. The complaint, spearheaded by Paul Fischer MD with DC-based lead counsel Kathleen Behan, alleges that the doctors have been harmed by the Medicare payment structure developed through the agencies’ reliance on the American Medical Association’s Relative Value Scale Update Committee (RUC).

The suit also claims that the agencies have functionally treated the RUC as a federal advisory committee. But they have not required the RUC to adhere to the Federal Advisory Committee Act’s (FACA) stringent management and reporting rules – e.g., balanced representation, transparent proceedings, and scientifically valid analytical methodologies – that keep the proceedings in the public interest. The plaintiffs request injunctive relief, which would freeze the relationship between CMS and the RUC until the advisory group complies with FACA’s requirements. Of course, compliance would drastically change the way the RUC conducts its affairs, something it is almost certainly loathe to do.

Continue reading “A Legal Challenge to CMS’ Reliance on the RUC”

Rethinking the Value of Medical Services

Brian Klepper and David C. Kibbe

First posted 8/1/11 on The Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

One of American politics’ most disingenuous conceits is that health care must cost what we currently pay. Another is that the only way to make it cost less is to deny care. It has been in industry executives’ financial interests to perpetuate these myths, but most will acknowledge privately that the way we value and pay for medical services is a deep root of America’s health care cost explosion.

When the Resource-Based Relative Value Scale (RBRVS) became the framework for Medicare payment nearly twenty years ago, it equated a medical service’s “value” with four categories of physician work inputs: time, mental effort and judgment, technical skill and physical effort, and psychological stress. The assessment process, handled from the outset by the American Medical Association’s (AMA) secretive, specialist-dominated Relative Value Scale Update Committee (RUC), delineates and quantifies a service’s inputs in terms of its Relative Value Units (RVUs) which, with a monetary multiplier, define its worth.

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The AAFP’s Bold Valuation Initiative

Brian Klepper

This morning, the American Academy of Family Physicians, the largest and “purest” of the major primary care societies – the American College of Physicians (ACP), the American Academy of Pediatrics (AAP) and the American Osteopathic Association (AOA) are all heavily influenced by sub-specialists – announced that it has convened a national task force charged with identifying new, better approaches to value primary care services.

This initiative is nationally significant for several reasons. By definition, it challenges the methodology used for nearly two decades by the American Medical Association’s Relative Value Scale Update Committee (AMA RUC), which has drastically under-valued primary care services while over-valuing many specialty services. By taking on this effort, it not only announces that the fruits of the AMA RUC’s labors are unacceptable, but also points out that the methodology the RUC uses to value medical services – this is founded on the Resource-Based Relative Value Scale (RBRVS) “input” taxonomy developed by William Hsaio’s team in the late 1980s – is incomplete and outdated. For example, the RUC’s methodology for calculating value doesn’t consider whether a service produced a worthwhile benefit to the patient or society, whether it was evidence-based or even necessary. More on this in a future article.

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Why Its OK That EHR Adoption Will Fall Below 2011 Goals

David C. Kibbe and Brian Klepper

First posted 7/06/11 on Kaiser Health News

2011 will be a disappointing year for the Centers for Medicare and Medicaid Services and the Office of the National Coordinator’s electronic health record incentive programs. We predict that few doctors and hospitals will meet the objectives set for the “meaningful use” of certified EHR technology. Meaningful use is, of course, the term that describes the objectives and measures providers and hospitals must meet in order to receive financial bonuses authorized by Congress in the HITECH portions of the economic stimulus bill of 2009. David Blumenthal, the former national coordinator, had hoped large numbers of doctors and hospitals would adopt EHRs starting in 2011, the first year bonuses are available. But, in reality, by the end of the year the percentage of physicians using EHRs won’t likely rise much above the current 20 to 25 percent rate.

This isn’t necessarily a bad thing. This year and, to a lesser extent, 2012, could be for “cleaning house.” Many older, costly and difficult-to-implement legacy EHRs will be replaced by less expensive, more agile systems that have been developed specifically for meaningful use and are deliverable in the cloud as Software-as-a-Service. Transitions like these take time, but the dynamics are foreseeable.

Continue reading “Why Its OK That EHR Adoption Will Fall Below 2011 Goals”

Secret Shoppers: Needing A Weatherman To Know Which Way The Wind Blows

Brian Klepper

Every now and then, a well-intentioned administration does something relatively harmless but so hare-brained and openly foolish that it takes our breath away. The Obama Administration’s primary care “secret shopper” plan fit this bill, and has already been shelved due to the withering criticism. My inbox a couple days ago was filled with rants by physicians of all political persuasions marveling at the lameness of the idea.

Here’s a short description from Robert Pear’s article in Sunday’s New York Times.

The administration says the survey will address a “critical public policy problem”: the increasing shortage of primary care doctors, including specialists in internal medicine and family practice. It will also try to discover whether doctors are accepting patients with private insurance while turning away those in government health programs that pay lower reimbursement rates.

Continue reading “Secret Shoppers: Needing A Weatherman To Know Which Way The Wind Blows”

A Physician Fallow Program To Improve Quality, Safety and Costs

David C. Kibbe and Brian Klepper First published 6/22/11 on the Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

In a recent New York Times op-ed, Rita Redberg MD, a cardiologist and Chief Editor of Archives of Internal Medicine, described the American health system’s penchant for delivering high volumes of “procedures and devices [to] patients who get no benefit and incur risks from them.” The culprit, of course, is fee-for-service reimbursement, used by Medicare, Medicaid and commercial health plans for the past 50 years, which encourages physicians to order more products and services, independent of appropriateness, with few checks and balances. Dr. Redberg notes the estimate by Medicare’s Chief Actuary that as much as 30 percent of Medicare’s expenditures — up to $150 billion/year, or about 9.4 percent of this year’s US budget deficit of $1.6 trillion — provides no value at all to patients. A 2008 PricewaterCoopers study put the waste estimate at nearly 55 percent of total national health care expenditures, a figure that, in 2011, would translate to almost $1.5 trillion, or just a shade under this year’s deficit. Continue reading “A Physician Fallow Program To Improve Quality, Safety and Costs”

Creating Value-Based Incentives for Primary Care

Brian Klepper and David C. Kibbe

First published 6/2/11 on the Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

In a remarkable recent interview, Donald Berwick MD, Administrator of the Centers for Medicare and Medicaid Services (CMS), eloquently described his vision of value-based health care.

Paying for value is an incentive…The underlying idea of improvement is that American health care, historically built in fragments, often cannot achieve for patients what it really wants to achieve…Health delivery system reform refers to really reconfiguring care into much more seamless coordinated-care operations so that people, especially those with chronic illnesses, experience continuity of care over time and space.

So when patients come home from the hospital, there is a smooth handoff, and all the necessary information follows them. When they are seeing a specialist, that specialist is coordinating care with their primary care doctor.

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Stifling Primary Care: Why Does CMS Still Support the RUC?

Brian Klepper, Paul Fischer and Kathleen Behan

First published 5/24/11 on the Health Affairs Blog.

Copyright ©2010 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

Last October, the Wall Street Journal ran a damning expose about the Relative Value Scale Update Committee (RUC), a secretive, specialist-dominated panel within the American Medical Association (AMA) that, for the past two decades, has been the Centers for Medicare and Medicaid Services’ (CMS’) primary advisor on valuation of medical services. Then, in December, Princeton economist Uwe Reinhardt followed up with a description of the RUC’s mechanics on the New York Times’ Economix blog. We saw this re-raising of the issue as an opportunity to undertake an action-oriented campaign against the RUC that builds on many professionals’ work – see here and here – over many years.

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Can Health Plans Explain Why They Aren’t Re-Empowering Primary Care?

Brian Klepper and David C. Kibbe

First published 10/30/2008 on The Health Care Blog

Brian’s Note: Recently I received a note from a New Jersey primary care physician who argued that, even more than Medicare, the health plans are killing primary care through extraordinarily low reimbursements. He wrote:

Through state legislation and regulatory changes over the past 10 years commercial carriers are now routinely and consistently paying less than Medicare in New Jersey.  Last year Aetna dropped to less than 65% of the local Medicare rate for a complex office visit.  This year, in my county, CIGNA dropped to 51.5% for the same office visit, and that’s when the RUC, as flawed as it is, declared that 53.5% of the full Medicare rate was what the practice overhead should be.  So now CIGNA is officially paying less than what the undervalued RBRVS system states is the cost of care.

To my mind, this type of reimbursement cannot be interpreted as anything else than an intentional effort to stifle primary care and it’s moderating influence over specialty, outpatient and inpatient excesses. While a robust literature – first by Barbara Starfield and more recently in Health Affairs – has nailed down that more primary care reduces risk and cost while improving quality, America’s health plans continue to pay primary care through volume-based reimbursement that functionally shortens office visits, increases specialty visits and diminishes our supply of primary care doctors.

David Kibbe and I asked about this problem this two and a half years ago. See below.

Sometimes a whisper is more powerful than a shout. Below is a cartoon from Modern Medicine that shows a Medical Home counseling session between a primary care physician (PCP), a specialist and the health plan. The PCP looks forlorn, while the specialist and the insurer have their backs turned, fuming. It is perfectly true.

Along with changing the way we pay for all health care and creating far greater pricing and performance transparency, we need to turn around the primary care crisis if we hope to substantively improve quality and cost.

Continue reading “Can Health Plans Explain Why They Aren’t Re-Empowering Primary Care?”

EHRs for a Small Planet

David C. Kibbe and Brian Klepper

First published 1/09/10 on The Health Care Blog 

Right now, American health care information technology is undergoing two enormous leaps. First, it is moving onto Web-based and mobile platforms – which are less expensive and facilitate information exchange – and away from client-server enterprise-centric technologies, which are more expensive and have limited interoperability. In addition, more EHR development activity is headed into the cloud, driven by large consumer-based firms with the technological depth to take it there. Both these trends will facilitate greater openness, lower user cost, improved ease of use, and faster adoption of EHRs.

But they could also impact the shape of EHR technologies in another profoundly important way. What is often lost in our discussions about electronic health record technology in the US is the relationship these tools have to our health and health care problems…globally. We could be designing our health IT in ways that are good for the health of people both here and around the world, not simply to enhance care in the US.

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A Case Study Presentation of the Transport Workers’ Union Clinic in St. Marys, GA

Brian’s Note: As I’ve noted before, I am Chief Development Officer of WeCare TLC, a leading edge onsite clinic firm based in Lake Mary, FL . WeCare now has 15 clinics in 5 states, and typically produces savings of 18-30 percent in the first six months, net of the clinic cost, while measurably improving population health status.

With Will Montoya, the broker on the case, I delivered a 9 minute case study presentation in October 2010 at the Health 2.0 conference in San Francisco, describing the experience and performance of our clinic for the Transport Workers’ Union (TWU) in St. Mary’s, GA. The union members are tradespeople on the Kings Bay Submarine Base. The group is fully insured with Blue Cross and Blue Shield of Georgia, and has 310 employees and 800 lives.

Prior to having the clinic, TWU had loss ratios (i.e., claims/premium) that typically ran about 85 percent. Within 4 months of the clinic’s opening, their loss ratio had dropped to 42 percent, and it has remained below 55 percent since.

In January 2010, after one year’s experience, BCBSGA offered a 2 year, 7 percent premium reduction. Comparably sized groups in the regions were receiving 25-30 percent annual increases.

While TWU is one of our smaller clinics, the mechanisms in play are the same for all our clinics. We chose this group to profile because the performance numbers were developed, not by us, but by BCBSGA.

A Growing Chorus On The RUC

Brian Klepper

Yesterday on Kaiser Health News, Barbara Levy MD, the Chair of the AMA’s Relative Value Scale Update Committee (or RUC), published a glowing defense of the RUC’s activities. Her article extols the work of the 29 physician volunteers who, “at no cost to taxpayers…generously volunteer their time,” “supported by advisers and staff from more than 100 national medical specialty societies and health care professional organizations.” She fails to mention that the physicians’ and organizations’ efforts to craft the RUC’s recommendations have direct financial benefit to the physicians, specialty societies and health care professional organizations whose representatives dominate the RUC proceedings.

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An Open Letter To Primary Care Physicians

Paul M. Fischer and Brian Klepper

If you agree with this letter, please redistribute, particularly to other primary care physicians.

Friends:

As many of you know, we have developed an effort to shine a bright light on the Relative Value Scale Update Committee, or RUC. A new site, Replace the RUC, provides a wealth of expert background information, and we’re working now to get more visibility on this issue.

A specialist-dominated panel within the AMA, the RUC is little known and under-appreciated, but extremely powerful and opaque. More important, through its longstanding relationship with CMS, it is central to the explosion in health care costs over the past 20 years, why primary care physicians are paid so poorly compared to their specialist colleagues and why few medical students now choose to enter primary care as a career. Meaningfully address the RUC, and you relieve America of more health system waste than all the cost control measures in the health care reform law combined.

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Time To Quit RUC-ing Up The Health Care System

Carol Gentry

First published 02/28/11 on Health News Florida

If we value our family doctors, why do we pay them so much less than specialists?

The Medicare payment system has been very good to physicians who use tools (scans, scalpels, stents, etc.) and not so good to those who use their heads.

A primary care physician’s job is time-consuming: asking good questions, listening well, and thinking about possibilities. And yet there is little financial reward for those activities — which is why primary care gets dissed in most medical schools and the ranks of family doctors are dwindling.

Continue reading “Time To Quit RUC-ing Up The Health Care System”

Hitting A Nerve

Brian Klepper

Earlier this week, a comment arrived on a new site I developed to promote ending CMS’ cozy relationship with the RVS Update Committee (RUC). The RUC is the AMA’s specialist-dominated panel that has distorted the value of health care services, been most responsible for strangling primary care and driven the health care cost explosion.

It was from a  physician responding to the article “Replace the RUC,” which tried to place the rationale and approach for this effort within a larger context. It urged primary care physicians to read up on the RUC’s background, and then demand that their societies publicly abandon it. He said:

Thank you, thank you, thank you.

This is exactly what many of us felt the AAFP should have done 15 years ago. The willingness of the primary care societies to continue to participate in the AMA’s intentional destruction of primary care must be some strange variant of the Stockholm syndrome!

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