The RUC’s Defense

Copyright 2011 – 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 (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 physicians 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 primary care’s stirrings. Marshaling the influence and discipline of a medical establishment that is obviously distressed by the prospect of having its economic franchise disrupted, it presents 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 aletter 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 in favor of 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.

In the late 1990s, CMS used a contractor to develop practice expense inputs for all physician services and when the process failed, the RUC stepped in to develop a new process with uniform standards and re-reviewed every service and cost input resulting in the redistribution of practice expense payments to primary care. Another CMS contractor hired to obtain the overall practice costs of each specialty could not fulfill its contract and, in 2007, CMS relied on the AMA and national specialty societies to collect the cost information. In addition, the RUC assumed the activity of identifying potentially misvalued codes, when CMS, using contractors, failed in its attempt. To date, the RUC has identified more than 900 services and redistributed more than $1.5 billion.

As a logical argument, this is roughly the equivalent of saying that patients have died in the past, so there is no point in having doctors now.

Next, the letter details different steps the RUC has taken to increase primary care reimbursement. It emphatically notes that, in a budget neutral environment, these increases have come at the expense of specialty reimbursement. But it fails to note that these few steps are the exception, not the rule, and that, 20 years after the RUC’s establishment, the average primary care physician can expect to earn $135,000 per year and $3.5 million during a career less than her specialist colleagues. The ramifications of this disparity are not lost on medical students, who now shy away from primary care in droves.

Third, the letter argues against the value of balancing the RUC’s physician-only composition.

Some, including MedPAC, have suggested an additional RUC-like panel, which would include economists and lay-persons in addition to physicians, to make recommendations regarding particular physician services that are perceived to be overvalued. We question the value of creating another panel and argue that this would not only be duplicative, but would add yet another bureaucratic layer to an already complicated process. In addition, the Secretary and CMS already enjoy considerable authority regarding the recommendations issued by the RUC and currently have the authority and ability to obtain input from economists and other individuals.

This is the keystone of the medical societies’ concern. Non-physician stakeholders might crimp the specialists’ agenda. Not mentioned here is the disproportionate high specialist representation in the RUC’s recommendation process.

While addressed to Rep. McDermott, a psychiatrist with deep knowledge of the RUC, the specialty societies’ letter is really aimed at Congress’ rank-and-file members, most of whom are not expert on the topic, and therefore susceptible to half-truths and innuendo.

The letter specifically ignores the core problems that CMS’ relationship with the RUC has created: economic incentives that encourage unnecessary and/or unnecessarily complex interventions while inhibiting primary care’s ability to moderate excessive care delivery throughout the continuum.

The arguments mounted by the AMA and the specialty societies are really nothing more than a vested industry’s efforts to preserve the status quo at all costs. (Think Wall Street’s apologists in this year’s Oscar-winning documentary, Inside Job.) But this approach has brought health care and the US economy to the brink of economic catastrophe.

Averting disaster will require an approach that dampens or bypasses the voices of the advisors who got us here, and strengthens the voice of primary care, which overwhelming data show produce better care at lower costs.

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