By Robert Centor, MD

The RUC is an easy target. The RUC is flawed. But the RUC is not the problem. Several bloggers have written extensively about the RUC – How the RUC Escaped a Challenge to Our Deeply Flawed Reimbursement System and US Senate Subcommittee Asks What the RUC is About.

In no way can I defend the payment schedules that the RUC has proposed to Medicare. I can defend their recent changes. Radiology payments decreased last year; interventional cardiology payments decreased last year; and many other procedures have decreased dramatically. The relative payments are still wrong (in my opinion), but the RUC actually has been responsive to criticism. They have increased primary care payments (admittedly not enough).

But if one studies the problem carefully enough, one must decide that the idea of paying per episode almost must lead to gaming the system. Forget the RUC, the entire idea of time independent episode based payment must lead to worse medical care and higher costs. If physicians can make more money by doing more, then some will.

Practice administrators push primary care physicians to see more patients each day. If we can decrease the time spent per patient from 20 min to 15 min then we could see up to 8 more patients in an 8 hour day. Our overhead has not changed – hence the marginal financial benefits are huge.

But any honest physician will tell you that the result is rushed medical care. Do we want our surgeon trying to do 5 surgeries today rather than 4? Do you want to be the 5th patient? Continue reading “The RUC is a Symptom. RBRVS is the Disease”

By Brian Klepper

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.

The RUC exerts its influence by rolling up the collective interests of the nation’s most powerful medical specialty societies and, indirectly, the drug and device firms that support and benefit from their activity. The RUC uses questionable “methodologies,” closed to public scrutiny, to value medical services. CMS has historically accepted nearly 90 percent of the RUC’s recommendations without further due diligence. In a damning October 2010 Wall Street Journal expose, former CMS Administrator Tom Scully described the RUC’s processes as “indefensible.”

Continue reading “How the RUC Escaped a Challenge to Our Deeply-Flawed Reimbursement System”

By Brian Klepper and Paul Fischer

Excessive health care spending is overwhelming America’s economy, but the subtler truth is that this excess has been largely facilitated by subjugating primary care. A wealth of evidence shows that empowered primary care results in better outcomes at lower cost. Other developed nations have heeded this truth. But US payment policy has undervalued primary care while favoring specialists. The result has been spotty health quality, with costs that are double those in other industrialized countries. How did this happen, and what can we do about it.

American primary care physicians make about half what the average specialist takes home, so only the most idealistic medical students now choose primary care. Over a 30 year career, the average specialist will earn about $3.5 million more. Orthopedic surgeons will make $10 million more. Despite this pay difference, the volume, complexity and risk of primary care work has increased over time. Primary care office visits have, on average, shrunk from 20 minutes to 10 or less, and the next patient could have any disease, presenting in any way.

By contrast, specialists’ work most often has a narrower, repetitive focus, but with richer financial rewards. Ophthalmologists may line up 25 cataract operations at a time, earning 12.5 times a primary care doctor’s hourly rate for what may be less challenging or risky work.

Continue reading “The Most Powerful Health Care Group You’ve Never Heard Of”

By Brian Klepper

On May 10^th, the US Senate Finance Committee, co-chaired by Senators Max Baucus (D-Mont) and Orrin Hatch (R-Utah), convened a remarkable panel of four former Administrators of the Health Care Finance Administration (HCFA) and the Centers for Medicare and Medicaid Services (CMS): Gail Wilensky, Bruce Vladeck, Thomas Scully and Mark McClellen. (See the video here.) Against a backdrop of intensifying budgetary pressures, the roundtable was to provide perspectives on Medicare physician payment, including several controversial issues: the Sustainable Growth Rate (SGR) formula, the Resource-Based Relative Value Scale (RBRVS), and the RVS Update Committee (RUC).

Ironically, the day before, a Maryland Federal District judge dismissed a suit brought against HHS and CMS by six Augusta, GA primary care doctors over CMS’ longstanding relationship with the RUC, based on a procedural technicality and without weighing the substance of the complaint.

Continue reading “Will Anyone Listen When Former CMS Chiefs Call For More Objective Physician Payment?”

By Brian Klepper

The dream of reason did not take power into account – modern medicine is one of those extraordinary works of reason – but medicine is also a world of power.

Paul Starr, The Social Transformation of American Medicine, 1984

How can primary care’s position be reasserted as a policy leader rather than follower? Even though it is a linchpin discipline within America’s health system and its larger economy – a mass of evidence compellingly demonstrates that empowered primary care is associated with better health outcomes and lower costs – primary care has been overwhelmed and outmaneuvered by a health care industry intent on freeing access to lucrative downstream services and revenues. That compromise has produced a cascade of undesirable impacts that reach far beyond health care. Bringing American health care back into homeostasis will require a approach that appreciates and leverages power in ways that are different than in the past.

But primary care also has complicity in its own decline. It has been largely ineffective in communicating and advocating for its value, and in recruiting allies who share its interests. Equally important, it has failed to appreciate and protect primary care’s foundational role in US health care and the larger economy, as well as the advocacy demands of competing in a power-based policy environment.

The consequences have been withering constraints that have diminished primary care’s value, and that have thwarted its roles as first line manager of most medical conditions, and as patient-advocate and guide for downstream services. Combined with fee-for-service reimbursement and a lack of cost/quality transparency, primary care’s waning influence has precipitated a cascade of impacts, allowing health industry revenues to grow at more than four times the general inflation rate for more than a decade, with unnecessary utilization and cost that credible estimates suggest is half or more of all health care spending. Continue reading “A Call For a New Primary Care Society”

By DINOSAUR MD

Medicine is simple and straightforward; except when it’s complex and nuanced.

Medical diagnosis is a simple matter of taking a history, performing an examination, and reviewing the results of ancillary testing; except when it’s a complicated case of eliciting subtle nuances from the patient in both the interview and the exam, and interpreting multiple pieces of conflicting data.

Medical treatment is a straightforward affair of providing appropriate treatment; except when there are multiple treatment options with unclear risks and benefits, technically challenging surgical or other procedures to perform, not to mention fully informing the patient and family about all of those treatment options, risks, and benefits, plus eliciting and answering all their questions.

Nothing to it.

Notice, though, that the key ingredient here is DIAGNOSIS. Performing a flawless appendectomy won’t do a thing for an ovarian cyst, nor will a PPI prescription do much for an acute coronary syndrome. Performance measures that look at treatment without addressing diagnosis are somewhere between misguided and ludicrous.

Why does American medicine have this so bass-ackwards? Follow the money. Thanks to the specialty-heavy RUC, the commission that sets fees for various procedures, doing something — anything — is paid far more handsomely than thinking (even thinking about what to do).

Continue reading “Pay for the “A””

By BRIAN KLEPPER & DAVID KIBBE, MD

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.

In a sense, the suit reflects the larger concerns of America’s increasing unrest: a general frustration with a system rigged to benefit the few at the expense of the many, privatizing profits while socializing losses. It calls into question an incentive structure that has resulted in half or more of all health spending providing no utility and translating to exorbitant cost but debatable value. In other words, the case is accompanied by a sense that the system, as it is currently constituted, is failing the American people.

Any simple examination of medical services payment reveals the systematic under-valuing of primary care services relative to procedural services, the direct result of the RUC’s valuation process. For example, in an earlier Health Affairs Blog post we compared a 99214 moderately complex established office visit with a routine cataract extraction and intraocular lens implant. The first has all of medicine as it’s palette. The second is a highly refined, low risk, repetitive procedure that is valued, on an hourly basis, at 12.5 times the first.

Continue reading “CMS’ Opportunity: A Lawsuit Offers A Chance To Reform Physician Payment”

By brian klepper

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 against CMS’ 20 year reliance on the AMA’s RVS Update Committee (RUC) for valuation of medical services.

There is the lawsuit by six Augusta, GA primary care physicians, spearheaded by Paul Fischer MD. (See his most recent article below). The suit claims that CMS’ and HHS’ longstanding primary relationship with the RUC has rendered that panel a “de facto” federal advisory committee. That would make it subject to the management and reporting rules of the Federal Advisory Committee Act  - transparent proceedings, representative composition, scientifically valid methodologies - that attempt to ensure the public over the special interest. The fact that CMS has never required the RUC to adhere to those rules presumably means that the relationship is out of compliance with the law.

The American Academy of Family Physicians (AAFP), after declining to join the suit, issued a series of demands: more primary care seats, a sunsetting of rotating sub-specialty seats, a dedicated gerontology seat, seats for non-physicians like patients, purchasers and economists. The RUC has until March to respond. If they reject the demands, the question is whether the AAFP Board will vote to walk, as David Kibbe and I urged them to do when we began this campaign last January.

Continue reading “The Primary Care Revolt”

By BRIAN KLEPPER & DAVID KIBBE, MD

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”

By BRIAN KLEPPER, PAUL FISCHER, MD, & KATHLEEN ANNE BEHAN

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.

We have focused on rallying the primary care and business communities to pressure CMS for change, and are contemplating a legal challenge. But the obvious question is why these steps are necessary. Why doesn’t CMS address the problem directly? Why does it continue to nurture the relationship?

The Negative Consequences Of The RUC

There is overwhelming evidence that the RUC has used flawed and capricious methodologies. It has systematically under-valued primary care and operated without regard for financial conflicts of interest. Its influence has compromised care quality and facilitated the primary care labor shortage. The Chair of the Medicare Payment Advisory Commission (MedPAC) is on record before a Congressional Committee describing its harmful characteristics. We know that the valuations it recommends – and CMS accepts – are major contributors to unnecessary utilization and cost. Former CMS Secretary Tom Scully has publicly condemned it as “indefensible.”

In studying the RUC closely, we have come to believe that the structure of CMS’ relationship with the RUC has violated the management and reporting requirements of a “de facto” Federal Advisory Committee. Meanwhile, the nation generally and publicly funded health care programs specifically are under intense fiscal pressures that have resulted, at least in part, from the runaway health care costs associated with the RUC’s influence. Continue reading “Stifling Primary Care: Why Does CMS Continue To Support The RUC?”