The RUC Is Bad Medicine: It Has To Go

Brian Klepper

Posted 8/12/13 on Medscape Business of Medicine

BK 711“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.

Mr. Scully echoed this sentiment recently.

“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.”

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The Centers for Medicare and Medicaid Services’ Quiet Coziness with Wall Street

Roy M. Poses, MD

Posted 12/09/11 on Health Care Renewal

[DSCN0083.JPG]An article from the Project on Government Oversight (POGO) reveals a new aspect of the growing coziness between the US government and big corporations with obvious relevance to health care.

CMS’ Coziness with Leaders of the “Capital Markets”

Here is the introduction and the example most relevant to health care:

Nearly a dozen senior staff at the Centers for Medicare and Medicaid Services (CMS), the giant agency that administers hundreds of billions in federal health care dollars, had been called to a meeting. After a discussion with five Wall Street professionals that lasted nearly two hours, one senior CMS analyst filed an ethics complaint that later went to the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS).

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CMS’ Opportunity: A Lawsuit Offers A Chance To Reform Physician Payment

Brian Klepper and David C. Kibbe

Posted 10/25/11 on the Health Affairs Blog

By mid-November, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) must respond to the legal complaint filed in a Maryland federal court by six Augusta, Georgia family physicians.

These doctors are not asking for money, but for relief from the negative effects brought about by CMS’ twenty year reliance on the American Medical Association’s Relative Value Scale Update Committee (RUC) for valuing doctors’ work. They are asking CMS to enforce the Federal Advisory Committee Act(FACA), which requires that regulatory agencies shield themselves from undue special interest influence. In the process, they are asking CMS to rethink Medicare’s approach to physician payment, with a mind toward recognizing and valuing primary care’s ability to treat the whole patient within a larger system of care. They are asking CMS to develop payment policy that supports the needs of patients over those of professional groups.

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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.

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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.

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The Awful Dichotomy Between Health Care Politics and Policy

Robert Laszewski

First posted 7/6/11 on Health Policy and Marketplace Review

Amy Goldstein has an important article in today’s Washington Post detailing the place Don Berwick, the Medicare and Medicaid administrator, finds himself in.

It is all but certain he will have to leave his post at year’s end, when his recess appointment expires, because the Senate will not confirm him for a lack of Republican support.

Berwick is one of the most respected health care experts in the country—his career has been dedicated to improving quality first and with that the cost of care. With the new law giving his agency more opportunities to experiment with new approaches and the ability to more quickly implement the things that work, he was the ideal choice.

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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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