The RUC survives and now our health system is worse off

The RUC survives and now our health system is worse off

On January 7, 2013, a federal appeals court rejected six Georgia primary care physicians’ (PCPs) challenge to the Centers for Medicare and Medicaid Services’ (CMS) 20-year, sole-source relationship with the secretive, specialist-dominated federal advisory committee that determines the relative value of medical services. The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is, in the court’s view, not subject to the public interest rules that govern other federal advisory groups. Like the district court ruling before it, the decision dismissed the plaintiffs’ claims out of hand and on procedural grounds, with almost no discussion of content or merit.

Thus ends the latest attempt to dislodge what is perhaps the most blatantly corrosive mechanism of US health care finance, a star-chamber of powerful interests that, complicit with federal regulators, spins Medicare reimbursement to the industry’s advantage and facilitates payment levels that are followed by much of health care’s commercial sector. Most important, this new legal opinion affirms that the health industry’s grip on US health care policy and practice is all but unshakable and unaccountable, and it appears to have co-opted the reach of law.

The RUC exerts its influence by rolling up the collective interests of the nation’s most powerful medical specialty societies and, indirectly, the drug and device firms that support and benefit from their activity. The RUC uses questionable “methodologies,” closed to public scrutiny, to value medical services. CMS has historically accepted nearly 90 percent of the RUC’s recommendations without further due diligence. In a damning October 2010 Wall Street Journal expose, former CMS Administrator Tom Scully described the RUC’s processes as “indefensible.”

The RUC’s distortion of America’s health care market, ramping up both care and cost, cannot be overstated. It has consistently over-valued specialty services and undervalued primary care services. Ophthalmologists performing cataract procedures are now paid 12.5 times the hourly rate of PCPs involved in a moderately complex office visit, arguably a more complicated activity.

At the same time, the erosion in primary care reimbursement has reduced office visit durations and undermined primary care’s moderating influence over specialty care. These dynamics are almost certainly responsible for the doubling of specialty referrals over the past decade.

The RUC’s excessive valuations of certain procedures — e.g., cardiac stenting, colonoscopies, back surgeries — have created lucrative incentives for over-utilization. 2008 OECD health data showed that, for every inpatient percutaneous transluminal coronary angioplasty (PTCA) performed on patients in the United Kingdom, New Zealand or Switzerland, we do more than four in the US. Then there are data showing a clinically inexplicable 15-fold increase in complex spinal fusions between 2002 and 2007, with adjusted mean hospital charges of $81,000.

All health care interests except primary care win under this arrangement. Everyone else loses. Unnecessary care puts patients at physical risk. Purchasers — taxpayers, employers and individuals — pay twice the cost of care in other developed countries, an economic burden that now threatens to pull the US economy off a cliff. And the role of PCPs gets short shrift.

The legal objection to the RUC

The core of the Augusta physicians’ legal challenge was that the RUC is a “de facto Federal Advisory Committee,” and therefore subject to the stringent accountability requirements of the Federal Advisory Committee Act (FACA). This law ensures that federal bodies have panel compositions that are numerically representative of their constituencies, that their proceedings are open, and that methodologies are scientifically credible. In other words, FACA ensures that advisory practices are aligned with the public interest.

The RUC adheres to none of these and is an object lesson in how special interests can be insinuated into and capture regulatory processes, displacing the public interest. For example, when the legal challenge was first filed, only 3 of 29 RUC panelists (10 percent) represented primary care, even though some 30 percent of US physicians practice primary care. RUC meetings are closed to the public, unless an invitation is extended by the Chair, and admission is tied to the guest signing a nondisclosure agreement. Determination of a procedure’s value has been based on as few as 30 survey responses by physicians who know that their reimbursement will be linked to how they have answered the questions.

The effects of the RUC’s influence

There are also several cascade effects. One is our crisis-level shortage of PCPs. All but the most idealistic medical students are steered away from primary care and into the specialties by relative low reimbursement. A PCP can expect to earn $3.5 million less over a 30-year career than a typical specialist. When the comparison is against high-earning physicians, like orthopedic surgeons, the difference is $10 million. Just as our boomer population reaches its years of highest health care use and cost, we’ll have a devastating primary care shortage, which in turn will propel traditional primary care cases into far more expensive and often unnecessary specialty care.

And, as lead plaintiff Paul Fischer MD has noted, the policies promoted by the RUC have degraded many areas of specialty medicine, narrowing care patterns as specialists “practice to the codes” that are most lucrative, and straining the collegiality that, until recent years, characterized most medical care.

One difficulty in challenging the RUC is that, to lay observers, it can appear to be a technical issue, accessible only to people who get down in the weeds. But it is foundational, defining the relative value of care services, which in turn drives pricing, profitability and care patterns.

That said, there are true experts who grasp the gravity of the problem. Among the most compelling are four former Administrators of CMS — Gail Wilensky, Bruce Vladeck, Tom Scully and Mark McClellen — who came together in a remarkable round table discussion last March in front of the Senate Finance Committee, co-chaired by Orrin Hatch and Max Baucus, unanimously agreeing that the RUC has been a colossal error and must be replaced (See the video here.) As Dr. Vladeck commented:

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.”

A laudable effort by six primary care physicians

America’s health care community should also acknowledge the tremendous effort mounted by the six Augusta, GA PCPs: Robert Clark, Becca Tally, Paul Fischer, Edwin Scott, Rob Suykerbuyk and Les Pollard. These physicians financed the legal challenge out of their own pockets and did so for no other reason than they were convinced of the huge wrong CMS’ relationship with the RUC perpetrates on the American people and on primary care. They are great American citizens who, unlike their primary care societies, took a stand on behalf of the public interest, literally putting their money where their mouths are and paying the price of admission to the legal system.

American health care has many problems that contribute to uneven quality and egregious cost, but CMS’ longstanding relationship with the highly conflicted and unaccountable RUC is among the most outrageous and damaging. Now, with legal remedies exhausted, the avenues of redress are limited.

As Dr. Vladeck noted, perhaps America’s looming fiscal crisis, driven primarily by its health care costs, can compel Executive or Congressional action on the RUC. Only if the CMS Administrator changes her agency’s reliance on the RUC in its current form, presumably with pressure from the White House, Congress and the HHS Secretary, can this problem be resolved. Doing so would be a huge step toward regaining our fiscal balance, not just in health care but for the nation as a whole.

Brian Klepper is Chief Development Officer of WeCare TLC and blogs at Care and Cost.

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  • drg

    know if there are any political or legal actions taken to expose this?
    This–meaning corporate america taking over the world.

    I wonder why this is not making the news? All I hear about is there is a shortage of PCP’s.
    Well NO WONDER!! There is no mystery in that! But to the newspapers and public it is a well kept secret with no solutions. The obvious solution of paying them!! is not addressed!!!!

  • NewMexicoRam

    I don’t see any hope for PCP’s anymore.
    The feds say primary care is the solution, but they keep funding the specialists. They also keep putting more and more paperwork to jump over in front of us, all the while they refuse to pay us to even keep up with inflation.
    It’s over. The fat lady just sang.

    • Suzi Q 38

      I agree, but it is not over.
      Find out what else you can do.
      Call or write to these doctors.
      Tell them what you think of their fight and thank them.
      Find out what else can be done. Ask these doctors.
      They must have a webpage or a facebook page.
      If not, start one, and start collecting donations.
      This is a loss, but it is not over.
      Show the court and insurance companies that you as a group of doctors are not “lying down” without a fight.
      Get together and find a doctor or two that has a relative or two that is a lawyer and will file another lawsuit in a different way.
      Get the AMA to back you doctors up.
      What are they, “lip service???”

      • NewMexicoRam

        The AMA is mostly specialists. Family docs can’t afford their annual dues anymore.
        No, it’s going to take the near demise of primary care before the nation identifies the problem and demands a change. In the voting booth.

        • Kristy Sokoloski

          NewMexicoRam, what can patients do to help you all get the point across that Primary Care is so valuable?

          • buzzkillerjsmith

            Nothing. Game over.

          • Kristy Sokoloski

            Buzzerkilljsmith, I am sorry that you feel that it is game over for the profession. Although, I have to wonder how it is that NPs and PAs are going to be able to handle those patients that have multiple chronic health problems which make for a very complicated medical history. Interesting aspect to ponder, but in the mean time I think that there is something that patients can do to get the point across about the value of Primary Care. I am just not sure yet what they need to do in order to make that happen.

          • N N

            Don’t worry, Kristy, according to NPs and their NP funded “studies” they are just as good if not BETTER than Primary Care Physicians and believe they should have independent and autonomous practice. Just ask them yourself.

          • Kristy Sokoloski

            They all need to be able to work together. As far as an NP being as good or if not better than a Primary Care Physician I have an opinion about that to which I will keep to myself. And as far as being able to be independent and autonomous when it comes to how they practice, I have an opinion on that as well, but will keep that opinion to myself as well.

        • Suzi Q 38

          What voting booth?
          I haven’t seen anything remotely similar to what you are talking about.

          • Kristy Sokoloski

            Suzi Q, I think when he’s talking about the voting booth he’s talking about is in the National election, or on a State level or both.

    • Suzi Q 38

      Get together and buy a full page ad in the NYT.
      I/2 page to the people, 1/2 page to the feds.

  • jb

    I agree primary care needs to be valued more. However, I think you’re barking up the wrong tree with RUC. All they’re tasked with doing is valuation of the time, complexity, and risk taken on by the provider in doing a service. Jacking up primary care “complexity” or “time spent” requires data for justification. And it does nothing to diminish overutilization (arguably the problem behind the complex spinal fusions and some vascular/interventional procedures). For those to start to decrease, you have to follow well-designed controlled trials for recommendations on appropriateness (same as arthroscopy for arthritis – ineffective). Evidence-based review boards are how the NHS in Britain handle this.

    But simply saying that the ophthalmologist’s extra years of training and extra liability shouldn’t amount to higher pay per hour than a primary care office visit runs counter to economic theory. The value to society is also considerable – restoring sight after cataracts is immeasurably valuable to society; controlling blood pressure or prescribing cortisone cream for a rash is important, but more vaguely so. Disclaimer – I’m not an ophthalmologist or a primary care provider.

    Finally, we are long overdue for innovation in the office. Specialists and interventionalists are routinely at the forefront of making care safer, more efficient, less costly per unit, and higher in quality. Patient satisfaction follows. There are some primary care practices that are doing innovative care; there are many more that simply follow the tired old practice models of yesteryear.

    A good start for all involved would be to make medical school paid for. It was rare in my med school class that anyone was a trust-fund baby, with their way paid through by mommy and daddy. That way, there are fewer incentives or disincentives toward rural vs. urban, primary care vs. specialty. But it’s going to take transparent discussion of the issues before the American people will say, “Sure, we’ll pay for our physician’s education.” It’s going to take disclosure of average graduating medical school student loan debt, and how that affects specialty choice and thus the costs of care.

    I leave with the advice of one of my former military commanders: “Telling me about a problem without offering me a solution is just whining.” So don’t whine – innovate!

    • southerndoc1

      “Specialists and interventionalists are routinely at the forefront of making care safer, more efficient, less costly per unit, and higher in quality”
      What planet are you living on? Robotic surgery, epidural steroids, cornary stenting for stable angina: all this is making care less costly and higher in quality?
      But you expect primary care docs to do “innovative care” (whatever that is), knowing in advance that they will get paid zero dollars and zero cents for doing so. Somehow, I haven’t met all those specialists who are doing these wonderful procedures for free.

    • N N

      “The value to society is also considerable – restoring sight after cataracts is immeasurably valuable to society; controlling blood pressure or prescribing cortisone cream for a rash is important, but more vaguely so.” —- and this is exactly why primary care is going downhill. When even a layman like yourself believes that controlling blood pressure is not that important (a.k.a. preventative care), and thus shouldn’t be paid well.

  • Suzi Q 38

    The AMA needs to get behind these physicians and help with their legal costs. Who is going to want to fight is if a group like this loses?
    Why isn’t the AMA doing more to help the primary doctors?

    • Kristy Sokoloski

      Patients also need to get involved in speaking up in defense of the Primary Care Physicians.

      • drg

        look at michael chens blog on mourning death of his practice on this site. he wants to write a letter to ny times with patients.

        • Kristy Sokoloski

          I think that’s a great idea.

    • drg

      The article is not clear but the AMA has chosen 31 physicians in a panel that decide the pay scales for medicare–the RUC. The panel consists of 3 PCP’s and 28 out of 31 are specialists. They are the ones that decide the rates–RUC. They are deciding the pay scale and medicare accepts these rates 90 percent of the time.

      • Suzi Q 38

        What is wrong with asking for a little more?
        Have you asked the 3 PCP’s on the panel what else you can do?

        • drg

          It’s very political Suzi. The AMA is the enemy here i hate to say it. They are supporting specialties which are tied to industry and procedures. They are very aware of what they are doing but won’t listen becuase it is very lucrative for them.

          the AAFP got 1 or 2 more token PCP’s on the ruc i think– but it is very biased and that is why PCP’s are not making it in private practice. OR at least a large part of why.
          on the other blog Dr. Chen is trying to get the public/ patients with PCPs to write a letter to the press. not sure what good that will do. are you interested and do you know of others that would be interested?

          • Suzi Q 38

            Which blog, the one about his practice?
            What needs to be said, and where do I send a letter?

          • drg

            yes. mourning his practice article. I have not yet heard back from him. To be honest not sure how much it can help? In any case you can contact him as well on his blog here or I will let you know if he contacts me. thanks,

  • YoungMD

    Drop insurance and get paid in cash…..

    • Kristy Sokoloski

      And the minute that happens the patients that need to have a Primary Care Physician the most will stop going to see their Primary Care Physician. While that’s not a wise move for someone who has multiple chronic medical problems, they will be forced to decide which is more important: eating and paying the mortgage/rent and electricity, or taking medications and keeping up with well adult visits. Not everyone can afford to pay cash to see their doctors. So if a Primary Care Physician stops accepting insurance and tells people to pay cash, where are they supposed to go? Dentists have done this already, and there are tons of people who need to get regular care from a dentist but can’t.

  • zack

    corruption is the name of the game!!!!

  • MightyCasey

    The AMA holds all the cards, and then reacts with amazement that patients can’t access accurate cost information – just witness the headlines last week when the JAMA article on the difficulty of getting clear pricing info on hip replacement published.

    Calculated disingenuity on crank is what it is.

    The AMA lobbies against single-payer, while ensuring that US healthcare remains business-as-single-payer. They fight price transparency, while setting those prices in secret. They’ve abandoned the clinicians on the front lines of medicine – PCPs – thus ensuring that the population will get sicker faster and need specialty care to remediate their sicker-faster.

    I’m not a conspiracy theorist, but those who see one here could be forgiven for doing so.

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