More on Physician Reimbursement, CMS, the AMA’s RVS Update Committee (RUC)


(Note by Brian Klepper: At Health Care Renewal, Dr. Roy Poses, a Clinical Associate Professor at Brown University’s School of Medicine, writes a consistently excellent blog on health care financial conflict . Both he and I have written extensively – a link to his most recent column is provided below; mine is here – about the obscene sole source advisory relationship that CMS maintains with the conflicted, lopsided and secretive AMA’s RVS Update Committee (or RUC).

Essentially, the facts are that the RUC, a proprietary committee within the AMA overwhelmingly dominated by specialists, has been the only advisor to CMS on physician reimbursement for many years. It has consistently urged CMS to increase specialty reimbursement at the expense of primary care.

The result has been to drive medical students into specialties. Over the last five years, the percent of medical school graduates going into Family Practice has dropped from 14 percent to 8 percent. Only 25 percent of Internal Medicine residents now go into office-based practice; the rest become hospitalists or subspecialists.

Here is Dr. Poses’ most recent post, reprinted from Health Care Renewal, this time on a recent report from the RUC that makes recommendations for paying physicians under the Medicare’s Patient-Centered Medical Home pilot. As you might suspect, this does little to change the current corrosive paradigm.)

We have posted a number of times, (most recently here, and see links to earlier posts) about the RBRVS Update Committee’s (RUC) responsibility for Medicare’s relatively poor reimbursement of primary care and other “cognitive” physicians’ services compared to procedures. This imbalance has rippled through all of US health care, affecting how private insurers and managed care organizations reimburse physicians, and generally how the US systems favors procedures over talking, examining, thinking, diagnosing, prognosticating, deciding, and prescribing and super-specialization over generalism and primary care.

The RUC ostensibly is just an advocacy group sponsored by the American Medical Association, yet it seems to be the only source of outside input about physicians’ reimbursement used by the US Center for Medicare and Medicaid Services (CMS). Given this influence, it is dismaying that it is secretive, unrepresentative, and unaccountable. Neither its membership nor proceedings are public. It is dominated by proceduralists and sub-specialists. It is unaccountable to US physicians, much less the general public.

CMS in its wisdom also put the RUC in charge of figuring out how physicians’ practices participating in trials of the patient-centered medical home (PCMH) would be paid. The PCMH has gotten a lot of buzz lately. It purports to be the modern way to characterize a well-functioning primary care practice. Various powers that be that now want to support primary care seem only interested in supporting such care that fits the PCMH model. Yet putting the RUC, which seems to be the single most important cause of the decline of primary care, in charge of payment for this new version of primary care, appears to be a great case of putting the fox in charge of the hen-house. On the Retired Doc’s Thoughts blog, Dr James Gaulte first pointed this out.

The RUC just released its report on how physicians providing medical homes ought to be paid. Now, on the Happy Hospitalist blog, this post dissected how the RUC came up with its recommendations, in all their mind-numbing detail. That blog summarized the results as “punching primary care in the face,” and furthermore,

The payment rates that are recommended are insulting and downright degrading. Do they think nobody is paying attention? These people have no business trying to create public policy.

Unless I’m completely off base in my interpretation, if I was an outpatient doc, I would run faster than Forest Gump from this proposed financial disaster.

This is a reminder of what can go wrong with a “single-payer health care system,” which is what Medicare is. When the government sets what physicians are paid, which is what happens in Medicare, (and de facto happens for our entire health care system, as private insurance companies and managed care organizations seem to slavishly follow the CMS’ lead as engineered by the RUC), the government ought to provide a rational, transparent, accountable method of doing so. The current RUC based system is the opposite, irrational, opaque, and unaccountable. If we don’t fix it, we can kiss primary care goodbye, with all the negative consequences that would entail. And further woe unto us if the calls for health care reform lead to “Medicare for all,” with the RUC based system intact.

Roy Poses can be contacted at Roy_Poses@brown.edu.

14 replies »

  1. Docanon: Whoa. I would hope we could all display a little bit of maturity and not let the anonymity of the internet lead to pseudo-personal criticisms. I don’t know you but you certainly don’t know me either or my life experience.
    The question is what the RBRVS has contributed to the primary care ‘crisis’. The complaint absolutely does revolve around the compensation of PCPs versus that of specialist physicians. So two things:
    1) Time frame DOES matter. It absolutely is imperative to look at data pre-RBRVS.
    2) The ratio of primary care physician median income to specialists median income is terribly important to the debate.
    Framed as such it doesn’t appear that the primary care physician has done worse under the RBRVS. Criticism the AMA for not doing enough to fix the disparity may be fair but imagining them actively working to worsen the situation just doesn’t seem backed up by the figures. I’m always open to new data. I’m always open to polite, well articulated criticism with my reasoning.
    That is all I have to say. This thread is dead.

  2. CT: I’ll keep this short. You’re a medical student, and you have no idea what you’re talking about, or to whom you are talking. But the main problem with your analysis is just simple arithmetic.
    Choose any timeframe you want, hell, even go back to the original use of ether as an anesthesia agent (probably the most important historical accident that set up the procedurist-cognate income divide)…no matter how you set this up, comparing percentage income growth is the classic way to lie with statistics. It’s absolute income (dollars, not ratios of dollars) that puts the BMW in the garage, and the absolute income discrepancy between procedurists and cognative specialists has widened. I’m done.

  3. Docanon: My apologies, I’ve commented a number of times on THCB with the data and posted the actual data extensively on my (admitted obscure website) and reposting it over and over seemed poor form.
    A disclaimer: let us admit that surveying physician take home income is extremely difficult and that you get considerable variation between surveys. All the various surveys have flaws. The MGMA survey is certainly respected but (as with many surveys) it polls only members and has a painfully low response rate. Other sources you could rely on include OECD data or the AMGA survey which have their own unique strikes against them
    But beyond the data used, it remains that the citation you made is a joke for a couple of reasons.
    First, framing the data whimsically from 1997 to 2004 provides us with no answers. Any look needs to go from prior to the RBRVS to near modern day.
    Second, looking at actual real income lost/gained is foolish. The medical and surgical specialists earned far more than primary care physicians long before the RBRVS. The only legitimate questions is how have primary care physicians done in ratio growth SINCE THE CREATION OF THE RBRVS? And how does that gain compare to other specialties?
    Based on limited freely available data yearly income growth has been better for the family practitioner and pediatrician (as surrogates for all primary care providers; a limitation I know but the MGMA data seems to imply the incomes are relatively interchangeable) since the RBRVS as compared to the immediate years before it (1988-1992).
    That percentage growth has also been comparable (or better) than the growth for MOST specialties (radiology, dermatology and a couple of others aside).
    The ratio of median income for all specialist income-to-PCP income also appears to have narrowed since the creation of the RBRVS.
    The data used to draw conclusions on median income growth will always have flaws but my bet is I’ve spent considerably more time doing my lit search than you have.
    I’ll spare the citations in this comment but say that you can find links to the sources at the following post. The sources include: AMGA survey data, OECD compiled data, pre-RBRVS HFCA survey data, and some others.

  4. Why is it not possible to pay all physician’s services based on average time spent, adjusted every 2 years or so (since technical changes may make the procedure shorter, or longer than anticipated)? And figure in that surgery and chemotherapy and other high risk stuff is in fact more stressful and risky than cognitive medicine (i.e. multiply by factor 1.5 or 2), and that some procedures may require some extra training not covered in residency because they are too new, but their use is desirable and merits to be supported by incentives (e.g. some stenting procedures).
    But the primary motivation to offer a procedure/test should be again that it makes sense medically (i.e. for the patient) – not financially. There are quite a few doctors who see medicine too much from an entrepreneur’s point of view. As I wrote here once, a dialogue like I once witnessed should not happen (Doctor A: “We should get into test XYZ, it is well reimbursed”, Doctor B: “Well, the evidence is not clear whether XYZ is superior to the old tests”, Doctor A: “Maybe, but it is the coming thing”). We should spend the healthcare money on tire rotations, oil changes and reasonable repairs, not on “fuel system cleaning”.

  5. “Technological advances have made this procedure a snap, relative to the past…”
    Ummm, nope, sorry, not even remotely true. The procedure is much more technically challenging and much more difficult to do well, with a low complication rate, and with a much higher expectation of a magnificent outcome. Are you aware that the average intracapsular cataract surgeon took less than 10 minutes to remove a cataract in the days prior to Charlie Kelman (props to Brian) and phacoemulsification? The AVERAGE surgeon. Now only the best surgeons have such an average, although they also now do the surgery with an implant and with a dramatically higher success rate and lower complication rate.
    Intracapsular cataract surgery > $1000 (fee did not include post-op visits which were billed separately) in the 1970’s. Phaco with an implant $659 in 2008 (post-op for 3 months included).
    The inherent fallacy in this line of argument, that it is the delta between primary care physicians and specialists that is at fault, is that the greatest increase in costs (and therefore the most fertile ground on which to find both savings and dollars to enhance primary care physician pay) is not some wild increase in specialist pay. It is rather a combination of newer, more expensive (and over-utilized) technology, more and more profitable (and over-utilized) hospitals, the widespread change from non-profit health insurance companies to for-profit, publicly traded companies, and the dramatic increase in the utilization of ever more expensive pharmaceuticals.
    We DO agree that nothing could be worse for primary care doctors than the status quo.

  6. The question of what fair physician reembursement is, is as old as Man. I’m glad they don’t cut our hands off anymore for a bad out come. The industry has never been fair to anyone. When Uwe invented the RBRUV it wasn’t suppose to be fair! What were they suppose to do, let medicare physician reembursement continue growing at 11% a year? Now we have the AMA, AAFP and the ACP presenting a new model of fairness and patient care. It has nothing to do with either. Do you really think that after fighting for years and spending millions of dollars preventing universal health care that they had some kind of moral epiphany? Or was the writing on the wall with Medicare and other healthcare programs facing bankruptcy, that they now have to make the rock bigger. It always astounds me to hear doctors lamblasting the Feds on reembursement. If the government hadn’t gotten involved in the 60’s in healthcare, half the physicians would be physician, but doing something else and probably not making $160-180,000. Get real.

  7. CT: the irony is painful…please cite some data. Unless you have a souce of physician’s income data that nobody’s ever published, you need to use the best available: MGMA surveys (not as good as the AMA’s surveys which ended in 2000, but the best around since then). Here’s some cold water on the idea that the procedurist/cognitive specialist income gap has decreased…just look at the income graph in this nice short summary:
    N Engl J Med. 2006 Aug 31;355(9):864-6.
    As you can plainly see, median procedurist (and radiologist) incomes have skyrocketed, while primary care incomes have remained basically flat. Actual numbers, friend.
    On the larger point about physician income disparities over time, sure, these existed before the RUC. But the RUC has worsened the situation, so why not bash away?
    The RUC is a perfect example of regulatory capture: the regulatee is controlling CMS (probably due to a host of factors including underresourcing of this agency). The RUC is a committee of amateurs, operating in a world of complete data fiction. They actually have something called “RUC time” for procedures…a rather telling choice of words since RUC time doesn’t reflect real-world time. Just try to square the colonoscopy times in this well-publicized article with the 30 minutes the RUC says it takes.
    N Engl J Med 2006 355:2533
    It’s no great mystery why the RUC relies on surveys (with laughably low response rates) to estimate procedure times…rather than, say, examining real-world times by auditing OR schedules.
    For bingo: physician payment for cataract surgery is still massively overvalued. Technological advances have made this procedure a snap, relative to the past…so physician work payments for this procedure (and all others undergoing similar technological advances) should be reduced until the rates with which residencies fill with US medical grads are equal across all specialties. Then the remainder of the slots can be topped off with FMGs, evenly distributed across all specialties. When this laborforce market equilibrium occurs, you’ll know that payments reflect the actual amount of work required to provide care in each specialty.
    But none of this is likely to happen as long as the RUC coopts CMS. How do we get rid of the RUC? MedPAC has shown the way: move RUC functions back within CMS, and let the folks in charge of deciding how Medicare should pay doctors be economists and statisticians (NOT doctors…can’t imagine a larger conflict of interest). This is sort of like removing pharmaceutical approval from the AMA during the early 1900s and creating the FDA. No doubt there will be problems, but nothing could be worse for primary care than allowing the current situation to persist.

  8. I believe that primary care physicians are under compensated but that has been the case for the history of modern American medicine and outdates the rise of Medicare’s fee schedule or the AMA’s attempts to influence such. Can we please back away from the essentially baseless bashing of the RBRVS and RUC?
    Look, we maybe can chastise the RUC for not doing enough but that is as much criticism as the actual figures will bear. From 1992 until today the primary care-versus-specialist income disparity has narrowed. Best data seems to imply that few (some but few) medical specialties have seen a percentage median income increase to rival the increase that primary care has seen since the RBRVS came into existence.
    Cite all the recommendations about medical home compensation that you want but the only true way to measure something like the RUC or the RBRVS is by outcome…not reports. While we should be doing more to improve our focus on primary care (and thus compensate accordingly), it remains that the outcome for the primary care physician since the RBRVS came into existence has been much less catastrophic than the medical blogosphere would make it out to be.
    Sadly, I doubt the actual numbers will stop the finger pointing…

  9. Perhaps there is a simple explanation, but I don’t understand why, if private insurers think that good primary care, and palliative care at the end of life for that matter, save money for both the system and for payers, why don’t they pay enough more than Medicare to make sure there is an adequate supply of those services? I know that private payers pay more than Medicare for most services, but occasionally they pay less. If good primary care and palliative care would reduce overall utilization, insurers should be able to pay a significant premium to Medicare without going broke. On the other hand, if it doesn’t save money, that’s another story.

  10. in response to Bingo — the point is that in the time it takes an opthalmologist to to a cataract surgery I can see the patient and treat their diabetes, high blood pressure, erectile dysfunction, cholesterol, and a couple of other medical and psychiatric problems, and I get paid a lot less than the opthalmologist. There is a tremendous inequity in how physicians who do procedures get paid relative to those of us who bust our rear-ends to keep people from getting sick. I SAVE Medicare thousands of dollars by taking care of little problems before they become big problems, but I barely get paid enough to make a profit for my trouble. Meanwhile, the cataract, heart cath, endoscopy, dermatology, and oncology mills go on and on giving patients all the care they will stand, whether it is right thing for them or not.

  11. “This is a reminder of what can go wrong with a “single-payer health care system,” which is what Medicare is. When the government sets what physicians are paid, which is what happens in Medicare”
    With ALL single-pay systems or just the U.S. Medicare system when the government isn’t controlling much but relying on the “foxes” at the AMA (And other industry providers a well)to set policy? . It is struggling to exist in the present political for profit/money’d system where the attraction away from public health is driven by what docs can make elswhere in the system. This is a result of a two tier system NOT single-pay.

  12. Hmmm…not sure how this squares with the decrease in reimbursement for cataract surgery over the last 20 years. Medicare, and consequently all third party carriers, has reduced surgeon payment approximately 60% in real, non-inflation adjusted dollars over the last 20 years. This on a procedure that has seen a dramatic increase in positive outcomes and an equally dramatic decrease in adverse events.
    Kinda tough to convince an ophthalmologist on this one, fellas…

  13. The issue of CMS maintaining an obscene sole source advisory relationship with the AMA is very enlightening, particularly after recognizing some of my own personal experiences with the way CMS uses “stealth” moves in the nursing home industry. CMS contracts out the oversight of each nursing home to each state’s health department. Numerous reports have shown how corrupt the oversight system is.

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