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…
In a recent Wall Street Journal article, Barbara Levy, Chairwoman of the Relative Value Scale Update Committee (RUC), commented on the American Medical Association’s (AMA’s) decision to have minimal primary care participation on the RUC, saying the committee is an “expert panel” and not meant to be representative. Since the committee is made up of 27 specialists, one family doc, and a pediatrician, the AMA apparently believes it requires little in the way of primary care expertise but lots of experts from every minute surgical specialty.
This is, of course, reflected in the AMA’s coding system. Most of primary care is condensed into four Evaluation and Management (E/M) codes: a “focused” encounter, an “expanded” encounter, a “detailed” encounter, and a “comprehensive” encounter (99212-99215). It does not matter whether the problem is a cold or an acute myocardial infarction. It does not matter if you worked with just the patient or the entire family spanning three generations. It does not matter if the problem was simple and common (eg, essential hypertension) or rare and complex (eg, pheochromocytoma). It does not matter whether you completed everything in a single visit or spent hours fighting with an insurance company for payment. And it does not matter whether you dealt with a couple of well-established problems or a dozen new ones. It is clear that the AMA has little expertise in this area. What is amazing is that they think they have enough!
In contrast, there are 400 pages in the CPT book to help proceduralists get maximum pay for their work. In general, procedure coding follows a scheme based on the part of the body, the number of times you repeat a procedure, how fancy the equipment is, and how many different names you can come up with to do the same work (eg, vein ablation, injection, sclerosing, ligation, interruption, excision, or stripping). This is obviously a boon for many physicians’ income.Continue reading…
An under-the-radar revolution is going on out there. It is a revolt of primary care physicians against the AMA and CMS. It is a request for parity with specialists. It is a movement to replace how primary care practitioners are paid.
Why the revolt against the AMA and CMS? Because primary care doctors yearn to correct myths about primary care vis-à-vis specialists, and because they believe, by altering how the AMA and CMS pay doctors, health costs can be brought down, and primary care can be re-invigorated. Health systems with a broad primary care base have lower costs. In the U.S., two-thirds of doctors are specialists, and one-third are in primary care, the reverse of most nations, which have 50% or lower costs.
In the early 1990s, the AMA formed the Relative Value Scale Update Committee (RUC), which specialists now dominate. RUC sets payment codes for doctors. Since RUC’s inception, the payment differential has been growing between primary care doctors and specialists, so much so that the typical primary care doctor now makes only 30% of what an orthopedic surgeon makes. On average, primary care incomes are 50% of those of specialists.Continue reading…
By BRIAN KLEPPER
On Wednesday, 47 American medical specialty societies sent Rep. Jim McDermott (D-WA) a letter, with copies to all members of Congress, containing a detailed defense of the American Medical Association’s (AMA’s) Relative Value Scale Update Committee’s (RUC). For 20 years, the RUC has exclusively advised the Centers for Medicare and Medicaid Services (CMS) on physician procedure valuation and reimbursement. On its face, the letter responds to a seemingly minor piece of legislation introduced by Rep. McDermott, H.R. 1256, the Medicare Physician Payment Transparency and Assessment Act, that would require CMS to use processes outside the RUC to verify the RUC’s recommendations on medical services values.
Conspicuously absent from the letter’s signatures were the nation’s three main primary care societies: the American Academy of Family Physicians (AAFP) – which has formally endorsed Mr. McDermott’s bill – the American College of Physicians (ACP) and the American Academy of Pediatrics (AAP). Last week, the New Jersey Academy of Family Physicians sent a letter to its parent organization, AAFP, “strongly encouraging” it to quit the RUC. It is as though the long-compromised primary care physician community, that makes up one third of American physician and handles half of our office visits, is suddenly mobilizing.
The medical societies’ letter is more than a response to just Rep. McDermott’s bill. It also responds to the primary care physician community’s stirrings. Marshaling the influence and discipline of a medical establishment obviously distressed by the prospect of having its economic franchise disrupted, it was the third public defense of the RUC in a little more than a week, following a column on Kaiser Health News by the RUC’s Chair, Barbara Levy MD, and a letter this past Tuesday to Rep. McDermott by AMA CEO Michael Maves. After 20 years of easily-validated intentional obscurity – ask virtually any room of physicians what the RUC is and watch the majority’s blank responses – this open activity favoring the RUC is unprecedented.
The letter is also obviously orchestrated, using many of the same tactics and arguments that Drs. Levy and Maves employed in their defenses. It carefully avoids talking about the abysmal real world consequences of the RUC’s historical approach. It ignores the dramatic under-valuing of primary care, the plummeting rates of medical students choosing primary care, the over-valuing and over-utilization of a wide variety of specialty procedures, and the inherent incentive for the RUC to focus on under-valued rather than over-valued procedures.
Instead, it obfuscates. To counter the McDermott proposal that CMS should use means other than the RUC to assess the RUC’s recommendations, the letter argues that past efforts to use contractors have failed. Therefore, it is senseless to go down this path again.Continue reading…
Yesterday on Kaiser Health News, Barbara Levy MD, the Chair of the AMA’s Relative Value Scale Update Committee (or RUC), published a glowing defense of the RUC’s activities. Her article extols the work of the 29 physician volunteers who, “at no cost to taxpayers…generously volunteer their time,” “supported by advisers and staff from more than 100 national medical specialty societies and health care professional organizations.” She fails to mention that the physicians’ and organizations’ efforts to craft the RUC’s recommendations have direct financial benefit to the physicians, specialty societies and health care professional organizations whose representatives dominate the RUC proceedings.
She points to the openness and transparency of the RUC’s proceedings, noting that “the general public is able to comment on individual procedures, and processes are in place to ensure that input from all stakeholders is considered by CMS. Finally, the AMA ensures transparency of the process, making the data and rationale for each RUC recommendation publicly available.” This, from an immensely influential Committee that refuses to share the identities of its members except by their societal affiliation, that keeps its proceedings private, and that can not be observed except by an invitation from the Chair. If anything, the RUC’s goings-on have been secretive and opaque. Go into any health care professional audience and ask, as I have, for a show of hands of people who know what the RUC is. It has been virtually unknown except in wonkiest circles.
Dr. Levy also points out that, in Medicare’s budget-neutral environment, hard decisions have to be made, and that in 2006, $4 billion – a little more than one percent of that year’s Medicare allocation – was transferred to primary care. The clear implication is that this came at the expense of specialists. But she conveniently ignores the vast majority of coding valuations that have increased specialty income while strangling primary care. (More comprehensive background on the RUC, including articles by the AMA that describe the RUC’s perspective in detail, may be found here.)
Dr. Levy’s article presumably responded to a growing chorus of recent voices that have detailed the RUC’s disastrous impact on American health care, beginning most recently last October with a Wall Street Journal expose by Anna Mathews and Tom McGinty, and an explanation in the New York Times by Princeton health care economist Uwe Reinhardt. With David Kibbe MD, I wrote about this topic on Kaiser Health News in January, calling on the American Academy of Family Physicians (AAFP) to abandon the RUC. Then Paul Fischer MD joined in with his Family Physician’s Manifesto. All this work built on the foundation of many health care professionals – John Goodson, MD; Robert Berenson, MD; Thomas Bodenheimer, MD; Roy Poses, MD to name a few – who have carefully documented the biases and excesses that have been wrought by the RUC’s shadowy process.Continue reading…
A tempest is brewing in physician circles over how doctors are paid. But calming it will require more than just the action of physicians. It will demand the attention and influence of businesses and patient advocates who, outside the health industrial complex, bear the brunt of the nation’s skyrocketing health care costs.
Much responsibility for America’s inequitable health care payment system and its cost crisis is embedded in the informal but symbiotic relationship between the Centers for Medicare and Medicaid Services and the American Medical Association’s Relative Value System Update Committee — also known as the RUC. For two decades, the RUC, a specialist-dominated panel, has encouraged national health care reimbursement policy that financially undervalues the challenges associated with primary care’s management of complicated patients, while favoring often unnecessarily complex, costly and excessive medical services. For its part, CMS has provided mostly rubber-stamp acceptance of the RUC’s recommendations. If America’s primary care societies noisily left the RUC, they would de-legitimize the panel’s role in driving the American health system’s immense waste and pave the way for a more fair and enlightened approach to reimbursement.
As it is, though, unnecessary health care costs are sucking the life out of the American economy. Over the past 11 years, health care premium inflation has risen nearly four times as fast as the rest of the economy. Health care costs nearly double those in other developed nations have put U.S. corporations at a severe competitive disadvantage in the global marketplace.Continue reading…
As a third-year medical student in 1977, I joined the American Academy of Family Physicians (AAFP). In those culturally tumultuous years, it was a way to declare my belief that America needed physicians who cared for the whole person, family and community. It was also a declaration that, in choosing the primary care path in a field ripe with tempting medical specialties, money was not my primary goal.
For much of my 33-year membership, I have considered the AAFP to be “my” organization. However, there is a time when one must step back and declare independence from organizations that have lost touch with their members. The AAFP does much that supports my day-to-day life as a busy family doctor, but for 33 years, its leadership has failed to fix the central problem for primary care in America: poor reimbursement.
I deal every day with complicated health problems of complex patients who are insured by companies singularly focused on limiting even the smallest cost. In return for managing these patients, which often involves critical and life-or-death decisions, I am paid by Medicare 60% less per hour than is a dermatologist, who, for the most part, treats trivial disease that involves no nighttime emergencies and little intellectual challenge.Continue reading…
A few weeks ago, my writing partner David C. Kibbe and I ran an article on Kaiser Health News called “Quit the RUC!“ that has caused some turmoil within the physician community, particularly in DC.
First, it noted that the RUC, the informal specialist-dominated AMA panel, has made recommendations for 20 years about the value of medical procedures within the highly arcane and jiggered Resource-Based Relative Value Scale (RBRVS). As the Wall Street Journal recently reported, CMS (and its predecessor, HCFA) has accepted some 90 percent of its recommendations, apparently almost without question. It shouldn’t surprise anyone that the vast majority of recommendations involve payment increases to specialists that have come at the expense of primary care.
This combination – a highly conflicted advisory panel making methodologically questionable recommendations about payment to a blithely accepting regulatory agency – is at the heart of the American health care cost crisis and the greatest reason why the American economy is literally being bankrupted by its health care costs. This year alone, we’ll spend about $1.3 trillion on health care products and services that provide no value. This is two-thirds again more than we’ll spend over the next decade on the economic stimulus package.Continue reading…