Stifling Primary Care: Why Does CMS Continue To Support The RUC?

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.

We have urged mobilizing against the problem, which precipitated energetic responses from the primary care community (as well as the AMA and specialty societies) and prompted the American Academy of Family Physicians (AAFP) Board to reconsider its longstanding participation in the RUC. At the AAFP’s May 5th meeting, the Board decided to continue studying the implications of abandoning the RUC. They intend to announce a final decision before their next meeting in September.

The Crucial Role Of The AAFP

The importance of the AAFP’s consideration cannot be overstated. A major primary care society quitting the RUC, with a public relations campaign that describes its immensely negative influence over care and cost, would almost certainly destabilize the RUC’s relationship with CMS. That would pave the way for a new, fairer, more transparent approach to medical service valuation.

AAFP, the largest primary care society, is the only society likely to be a force for positive change on this issue, at least initially. With about 65,000 practicing family doctor members, about 10 percent of America’s physician population, AAFP is also the “purest.” The “other primary care” societies – the American College of Physicians, the American Academy of Pediatrics and the American Osteopathic Association – are heavily influenced by sub-specialists, whose interests, motivations and compensation are often very different than those of primary care physicians.

The AAFP is moving carefully (as it should), but a decision to abandon the RUC is anything but a foregone conclusion. A sizable contingent of members have demanded that the society leave the RUC – the New Jersey and Florida chapters have both sent letters to this effect, as has the AAFP’s influential National Conference of Special Constituencies – but AAFP’s leaders have hedged their bets. An April 5th AAFP article details President Roland Goertz’ assessment:

“The mechanism for how (Medicare payment) codes are evaluated has contributed to the devaluation of family medicine and primary care through the years,” said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas. He added that it doesn’t seem likely the current RUC process will change this imbalance…

The AAFP is not calling for the elimination of the RUC, said Goertz…He noted that the AAFP has for years asked the AMA to provide more primary care physician representation on the RUC and to provide greater transparency in terms of how the RUC’s votes are taken. “But there does not appear to be movement in that direction,” he said.

Got that? The RUC has, over many years, under-valued primary care. We’ve advocated for more representation and transparency, which the specialists in control refuse. But this process deserves our continued support.

After two decades of declining reimbursement that has gutted primary care’s viability, this fence-sitting should be the focus of every AAFP member. A Board decision to continue enabling the RUC, for fear that the implications might somehow be worse than primary care’s current slow strangulation, should bring into question AAFP’s capacity to represent its members’ interests.

At the same time, we should remember that, like patients, purchasers and the larger American economy, primary care physicians are victims here, not perpetrators. The real culprit is the relationship between CMS and the RUC, which has systematically embedded financial incentives into payment policy for unnecessary and unnecessarily complex procedures, while economically stifling primary care and its inherent ability to moderate unnecessary services.

This is a structural problem that lies at the heart of America’s health care cost crisis, and its impacts are clear. What is not clear is why a massive effort should have to be mounted to correct such an acknowledged blight on our health care system. By addressing the elephant in the room, CMS has an unprecedented opportunity to shortcut the process. It could sever its relationship with the RUC, and establish a new approach to medical services valuation that is more transparent, sound and in the public rather than the special interest.

This post first appeared at Health Affairs Blog on May 24, 2011. Copyright ©2010Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

Brian Klepper is an independent health care analyst, Chief Development Officer for WeCare TLC Onsite Clinics and the editor of Care & Cost. His new site, Replace the RUC, provides extensive background on the issue. Paul Fischer MD is a family doc at the Center for Primary Care in Augusta, Georgia.

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  2. Hey, I think your blog might be having browser compatibility issues. When I look at your website in Ie, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, great blog!

  3. The ONLY WAY for primary care to restore the power and sanctity of the doctor-patient relationship is to tell CMS and the insurance companies to take a hike (that’s putting it nicely) and do direct pay with patients. Just think of all the time, effort and mental energy we all put into trying to get paid by the gov and ins co’s. What a waste! They have no business in primary care just like your auto ins has no business “helping” you buy tires or change your oil. Can’t be done? Look at Apex in NC (Dr. Brian forrest) and Qliance in Seattle for models that work great. And don’t tell me patients can’t afford it; they just need to get their priorities in proper order (Dr Forrest charges $49 for an hour appt!). We’ve all become such suckers in this money/power game. It’s time to do away with non-catastrophic insurance (interference) in all of primary care and tell the 3rd party payers where to go.

  4. We make out better under private insurance. Like I said initially, we may be overpaid by private. Medicare, I’m not sure I agree with you. The reason is that a Medicare only OR would not support a (possibly overpaid) CRNA. There would be zero ( or less) left over for the supervising anesthesiologist. Medicaid, of course, ia worse.
    That said, I am in no way crying poverty or trying to minimize the challenges primary care docs are facing. Just throwing some numbers out there for another perspective.

  5. Primary care is not the only specialty that suffered under the medicare relative value scale. In anesthesia we currently are reimbursed less than 1/3 under Medicare than most private insurance plans. Perhaps we are over reimbursed from private insurance – I don’t know, but here is how it works out with Medicare only:
    An average operating room generated 10,000 ASA billing units per 52 weeks including it’s off-hour cases. Medicare pays about $19.50 per unit giving each operating room $195,000 gross revenue per year. Billing is $25/case outsourced. That leaves about $172,000 per year. Subtracting 4/52 to allow for four weeks vacation coverage leaves about $160,000 gross. If it is a large group that requires any administrative overhead beyond billing, subtract out more. Then subtract out malpractice. That will leave maybe, maybe $140,000 per year for W2, retirement, license fees, society memberships, disability insurance,etc.
    Now: are all specialists still overpaid by Medicare?

    • Median anesthesiology job $332,000? Probably not. But at $185,000 FP is grossly underpaid.

    • “Primary care is not the only specialty that suffered under the medicare relative value scale. ”

      You’re confusing RVUs and conversion factor. By any standard, anesth. makes out MUCH better than primary care under Medicare and private insurance.

  6. I think it is important for the AAFP to do as Brian et all suggest and secede. This will prevent the specialist members of the RUC from ‘spinning’ the story that everyone is against the RUC for political reasons rather than the patent unfairness that it perpetuates. Put the blame exactly where it lies.

  7. ” what is being proposed as a replacement for the RUC?”

    Maybe CMS doing the job it is mandated to do, rather than lazily rubber-stamping propaganda from the AMA?

  8. Margalit,

    See here – http://replacetheruc.org/2011/04/23/facing-uncertainty-why-primary-care-docs-must-act-now/ – where I give some examples of alternatives. The larger point is that the current mechanism has been demonstrably terrible for patients, purchasers, primary care physicians and the American public. Paralysis, due to fear of what it might be replaced with, is hardly a rational policy response. There are better approaches available, but they’ll require vigilance. As has been amply demonstrated, much of health care is about money and control, and many groups are constantly jockeying for positioning with those goals in mind.

  9. “You’re kinder than I am! The purpose was to destroy primary care in this country: why does he feel the need to be diplomatic about that?”


  10. ” he was diplomatically stating that the RUC has served a purpose under FFS reimbursement”

    You’re kinder than I am! The purpose was to destroy primary care in this country: why does he feel the need to be diplomatic about that?

  11. PCP, I believe that if you carefully reread the interview with Dr. Berwick, he was diplomatically stating that the RUC has served a purpose under FFS reimbursement, but that as we move toward more risk- and performance-based models, they become an anachronism.

  12. In a May 18 interview available on the AAFP website, CMS head Dr. Berwick praises the work of the RUC. Go figure.

    I agree with with Dr. Vickstrom: the leadership of the AAFP has gone from grossly incompetent to actively hostile to practicing physicians.

  13. The AAFP’s continued participation in the RUC is the reason I left it years ago. As long as they cooperate and give cover to interests dedicated to destroying family docs, I will not give them a single cent.

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