Will Anyone Listen When Former CMS Chiefs Call For More Objective Physician Payment?

On May 10th, 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.

The physicians challenged CMS’ refusal to require the RUC to adhere to the public interest rules of the Federal Advisory Committee Act (FACA) that typically apply to federal advisory bodies. The suit described the harm that has accrued to primary care physicians, patients and purchasers as a result of the RUC’s highly politicized process. To a large extent, the plaintiffs’ concerns closely reflected those of the former CMS Chiefs.

This was a deeply experienced and dedicated group, all with long government-involved careers. Surprisingly, independent of their divergent political perspectives, there was broad agreement on the direction that physician payment should go. All believe we need to move away from fee-for-service (FFS) reimbursement and toward alternative reimbursement paradigms, like capitation or bundled payments. All agreed that FFS would likely remain present in various forms for many years. There was a general sense that the RBRVS system was built on a series of errors, and that CMS’ relationship with the RUC started off, to use Dr. Wilensky’s term, “innocently enough,” but has become increasingly problematic over time.

Here is Dr. Wilensky’s description of how the CMS-RUC relationship came about.

It [the RUC’s formation and relationship with HCFA] happened innocently enough. Once you had the Relative Value Scale in place you needed to have a way to update relative values and to allow for a change. The AMA, as best we can tell…- sometime after I left to go to the White House, after he -[Bruce Vladeck] was sworn in, there was a lot going on, it was relatively new, in its first year – the AMA approached the Agency about whether it would allow it or like to have the AMA be the convener that would include all physician groups and make some recommendations which initially were very minor adjustments that hardly affected the RBRVS at all. The Agency accepted the offer.

Tom Scully, CMS’ Administrator under George W. Bush, took responsibility for helping facilitate the AMA’s involvement and was perhaps the most passionate that it had been an error.

One of the biggest mistakes we made … is that we took the RUC…back in 1992 and gave it to the AMA. …It’s very, very politicized. I think that was a big mistake…When you go back to restructuring this, you should try to make it less political and more independent.

I’ve watched the RUC for years. It’s incredibly political, and it’s just human nature…the specialists that spend more money and have more time have a bigger impact…So it’s really, it’s all about political representation, and the AMA does a good job, given what they are, but they’re a political body of specialty groups, and they’re just not, in my opinion, objective enough. So when you look at the history of it, CMS is starting to push back more, which is a good thing, I think it would be much better to have an arms-length transaction where the physician groups have a little more of an objective approach to it. And, look, that is the infrastructure of $80 billion of spending. It’s not a small matter. It’s huge.

But perhaps the most striking statement was made by Bruce Vladeck, HCFA Administrator during the Clinton Administration. In speaking about the problems generated by RBRVS (and by inference, the broader issues of SGR and the RUC as well) in the face of severe economic stresses, he called for the leadership and will required to simply do the necessary course correction.

I’m hopeful that some combination of the need to address overall deficit reduction strategies more generally and a different kind of political climate in the relatively near future will create the opportunity for people to say, “We made a mistake in 1997. We created a formula that produces irrational and counterintuitive results, and we’re just going to abolish it and start all over again in terms of some kind of cap on Part B payments. It’s the only way we’re going to get out of this morass.”

In a policy environment less susceptible to influence and more responsive to real world problems, the gravity of consensus on display at this roundtable would justify a call to action. As it was, it validated what many know: that we are rushing headlong down a catastrophic path, steered by forces other than reason and responsibility. The best we can hope for is that someone with authority and courage is listening.

Brian Klepper, PhD, is an independent health care analyst, Chief Development Officer for WeCare TLC Onsite Clinics and the editor of Care & Cost. His website, Replace the RUC, provides extensive background on the issue.

Livongo’s Post Ad Banner 728*90

Leave a Reply

7 Comment threads
2 Thread replies
Most reacted comment
Hottest comment thread
6 Comment authors
invinciblepodiu56.over-blog.comcommunication, skills, leadership, development, speaking, public, tips, how to, lead, a group, a team, prepare a, speech, write a, goals, success, speak, communicate, successful, tools, develop, toastmasters, learn, speaking, group, club, comfortable, topThomas kline mdThomas Kline MD PhDBobbyG Recent comment authors
newest oldest most voted

This piece oof writing will help the internet visitors for creating nnew weblog or even a blog from start to end.

communication, skills, leadership, development, speaking, public, tips, how to, lead, a group, a team, prepare a, speech, write a, goals, success, speak, communicate, successful, tools, develop, toastmasters, learn, speaking, group, club, comfortable, top

I’m don’t particular the best place you happen to be obtaining your info, however wonderful topic. I has to spend some time determining far more or even hitting the gym a lot more. Thank you for fantastic information and facts I became searching for this info in my assignment.

Brian Klepper

Dr. Kline: A free-for-all scenario is not the only or likely one. There are precedents for good government. The Augusta GA PCP’s lawsuit against CMS and HHS is based on those agencies refusal to adhere to the stringent rules of the Federal Advisory Committee Act, which most other federal advisory committees do follow. These rules are designed to ensure that regulation is formulated in the public rather the special interest. They call for transparent proceedings, for panel compositions that reflect the real world, for credible scientific methodologies and for avoidance of financial conflicts. The RUC currently violates all these basic… Read more »

Thomas Kline MD PhD
Thomas Kline MD PhD

Abandon RUC – then what. It has to be outside the AMA/CMS. Imagine if you will a Commission for Payment, created by CONGRESS as a quasi agency. Set aside the details and listen to the strategy. Seven Board Members from various medical and non medical fields would be “impartial judges” or “commissioners”. They would be protected from influence by law – like judges. They would have nice budget and plenty of staffers (congressional subcommittee model) First job: establish a global hourly figure for average physician work, by what ever means THEY thought. Then each of the medical fields would appear,… Read more »

John R. Graham
Guest is a very well organized and persuasive website. It tells the story very well. As an opponent of PPACA, I know how effective a well-designed lawsuit can be. But I still just can’t see how any committee can determine these relative values. Let me go metaphorical. The current Administration believes that turning Medicare into a voucher (cf. Paul Ryan) would be an abomination. To be consistent, the Administration should advocate cancelling Social Security monthly deposits and channeling that money to providers of, e.g., housing. How would it determine what prices to pay to design, build, and rent seniors’ housing?… Read more »

Brian Klepper

Mr. Graham, My colleagues and I have explicated the structure and dynamic’s of the RUC in many articles that typically first on Kaiser Health News or the Health Affairs Blog, but then have been aggregated to a single site, Primary care has largely been outmaneuvered by votes on the RUC, and they’ve been astonishingly clueless about the power dynamics, claiming victory when geriatrics and primary care were given next seats in May, when in fact the numerical balance of power did not change. The most important change that is necessary is for the RUC to adhere to the rules… Read more »

John R. Graham

Mr. Klepper, please lead us to a more precise solution. Any program where the government fixes payments will suffer what Hayek called the “pretense of knowledge”. It is not possible for either politicians or bureaucrats to determine the value to patients of medical services or devices. So, they rely on influences which act with unconstrained self-interest (i.e. the RUC). Besides which, there is no objective measurement of value. The value of any good or service is determined by the user – the patient. Value is subjective. Nor do I understand how the specialists beat the primary-care docs via the RUC.… Read more »


“Value is subjective.”

I would take issue with that. That’s simplistic.

Thomas kline md
Thomas kline md

The RUC votes. Primary care is outnumbered four to one by those doing high-priced procedures. The rock needs to go needs to be replaced by an independent commission. Five commissioners who listen to testimony and set prices based on a global per hour rate. Surgeonsmight argue that he or she has more training and I should have a multiplier. They would have to stand before a commission and argue with that multiplier should be. Same would be true for all procedures specialites. All would argue for multipliers. Experience should also count and the equation. Every five years for you should… Read more »