healthy4u: RUC

Another Attempt to Show the RUC Behind the Curtain

In 2007, readers of the Annals of Internal Medicine could read part of the solution to a great medical mystery.(1)  For years, health care costs in the US had been levitating faster than inflation, without producing any noticeable positive effect on patients.  Many possible reasons were proposed, but as the problem continued to worsen, none were proven. Prices are High Because They are Fixed That Way The article in the Annals, however, proposed one conceptually simple answer. The prices of most physicians' services, at least most of those that involved procedures or operations for Medicare patients, were high because the US government set them that way. Although the notion that prices were high because they were fixed to be so high was simple, how the fixing was done, and how the fixing affected the rest of the health system was complex, mind numbingly complex. Perhaps because of the complexity of its implementation, the simplicity of the concept has not seemingly reached the consciousness of most American health care professionals or policy makers, despite the publication of several scholarly articles on the subject,.<a href="http://hcrenewal.blogspot.com/search/label/RUC">efforts by humble bloggers such as yours truly,</a> a major journalistic expose, and recent congressional hearings.  The lack of discussion of this issue seemed to be a prime example of what we have called the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>, that important causes of health care dysfunction whose discussion would discomfit those who are currently personally profiting from the current system rarely produce many public echoes.  (For a review of what is known to date about how the offputtingly named Resource Based Relative Value Scale Update Committee (RUC) works, and previous attempts to makes it central role in fixing what US physicians are paid public, see the Appendix.) The Washington Monthly Pulls Back the Curtain Now another attempt to pull back the curtain that hides the RUC was just made by the Washington Monthly.  A long, detailed, well-written <a href="http://www.washingtonmonthly.com/magazine/july_august_2013/features/special_deal045641.php">article</a> by Haley Sweetland Edwards went through the major points, and included some new discoveries.  She asserted: The RUC is Well Hidden <blockquote class="tr_bq">[The RUC is] probably one of the most powerful committees in America that you’ve never heard of.</blockquote> The RUC Fixes Prices <blockquote class="tr_bq">when a roomful of professionals from the same trade meet behind closed doors to agree on how much their services should be worth. It’s called price-fixing. </blockquote> The Government Enables the RUC to Fix Prices <blockquote class="tr_bq"> this kind of 'price-fixing' is not only perfectly legal, it’s sanctioned by the U.S. government. At the end of each of these meetings, RUC members vote anonymously on a list of 'recommended values,' which are then sent to the Centers for Medicare and Medicaid Services (CMS), the federal agency that runs those programs. For the last twenty-two years, the CMS has accepted about 90 percent of the RUC’s recommended values—essentially transferring the committee’s decisions directly into law.</blockquote> The Government Fixed Prices are Endorsed by the Private Sector <blockquote class="tr_bq"> private insurance companies also use Medicare’s fee schedule as a baseline for negotiating prices with hospitals and other providers. </blockquote> The Price Fixing Drives Up Costs and the Use of Services <blockquote class="tr_bq"> So if the RUC inflates the base price Medicare pays for a specific procedure, that inflationary effect ripples up through the health care industry as a whole.</blockquote> These Incentives Cripple Primary Care <blockquote class="tr_bq"> These manipulated prices are also a major reason why specialists are in oversupply in many parts of the country, while a worsening shortage of primary care providers threatens the whole health care delivery system. </blockquote> These Incentives Benefit Big Corporations, not just Medical Specialists <blockquote class="tr_bq"> the incentives are perfectly aligned: ordering that extra test means more money for a doctor’s practice or hospital, more money for the labs, and often more money for the device makers and drug companies, too. (Oh, and, by the way, the device makers and drug companies are, not incidentally, major funders of the medical specialty societies whose members vote on the RUC.)</blockquote><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHWzSplnD2du3x_SfpKZJ5CaSFXrAoZkdhDxue_1J1f0wQIAV2rbRMgDA-oHz01r7lgv341htPKIV2_EfPKtU_eEAzu6xAn9ZPSUdVYtqfaappwD18k5EziA-KfAvazcaaooKFrlj7doQ9/s1600/SpecialDeal(WashingtonMonthly0713).jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="195" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHWzSplnD2du3x_SfpKZJ5CaSFXrAoZkdhDxue_1J1f0wQIAV2rbRMgDA-oHz01r7lgv341htPKIV2_EfPKtU_eEAzu6xAn9ZPSUdVYtqfaappwD18k5EziA-KfAvazcaaooKFrlj7doQ9/s320/SpecialDeal(WashingtonMonthly0713).jpg" width="320" /></a></div> [Art by Monte Wolverton for the Washington Monthly article] What to Do and What Will Happen? We previously wrote,  Economists have beaten us over the head with idea that incentives matter.  The RUC seems to embody a corporatist approach to fixing prices for medical services to create <a href="http://hcrenewal.blogspot.com/search/label/perverse%20incentives">perverse incentives</a> for physicians to do more procedures, and do less conversing with and examining patients, examining the best clinical research evidence about their problems, and rigorously thinking about how best to help them.  More procedures at higher prices helps physicians who do procedures.  It may help even more the corporations that provide the devices and drugs whose use is necessitated by such procedures, and the hospitals who can charge a lot of money as sites for performance of procedures.  It may even help insurance companies by driving ever more money through the health care system, and thus allow rationalization for higher administrative expenses as a function of overall money flow. Yet incentives favoring procedures over all else may lead to worse outcomes for patients, and more costs to patients and society.  If we do not figure out how to make incentives given to physicians more rational and fair, expect health care costs to continue to rise, while access and quality continue to suffer. Ms Edwards ended her article with two specific suggestions: <blockquote class="tr_bq">take the process away from the control of the AMA and put it in the hands of a well-resourced group of experts under the auspices of the federal government. This might take the form of a panel of doctors employed by the government, or of an advisory committee of representatives of different medical societies but with greater representation of primary care doctors.</blockquote> Or <blockquote class="tr_bq"> get Medicare out of the business of funding fee-for-service medicine. </blockquote> I can only hope that the latest Washington Monthly article, which was accompanied by an <a href="http://www.washingtonmonthly.com/magazine/july_august_2013/editors_note/the_doctor_cartel_will_see_you045632.php">editorial</a> and a short first-hand <a href="http://www.washingtonmonthly.com/magazine/july_august_2013/features/a_day_in_the_life_of_a_primary045640.php">account</a> of how difficult is the lot of the modern primary care physician, will succeed in increasing awareness of the RUC and its essential role in making the US health care system increasingly unworkable.  Of course, such awareness may disturb the many people who are making so much money within the current system.  But if we do nothing about the RUC, and about the ever expanding bubble of health care costs, that bubble will surely burst, and the results for patients' and the public's health will be devastating. APPENDIX - Background on the RUC  We have <a href="http://hcrenewal.blogspot.com/search/label/RUC">frequently posted</a>, first <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here in 2007</a>, and more recently <a href="http://hcrenewal.blogspot.com/2010/07/primary-care-and-hc-renewal-ruc-kus.html">here,</a>  <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>, <a href="http://hcrenewal.blogspot.com/2011/02/replace-ruc.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2011/03/getting-out-of-our-ruc-open-letter-to.html">here</a>, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or <a href="http://hcrenewal.blogspot.com/search/label/RUC">RUC</a>. Since 1991, Medicare has set physicians' payments using the Resource Based Relative Value System (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort they expend, and the resources they consume on particular patient care activities. Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care vs procedures, over time it has had the opposite effect, as explained by Bodenheimer et al in a 1997 article in the Annals of Internal Medicine.(1) A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, and understanding patients' values and preferences when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients.   As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments.   However, the identities of RUC members were opaque for a long time, and the proceedings of the group are secret.  As Goodson(2) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review."   In fact, the fog surrounding the operations of the RUC seems to have affected many who write about it. We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until 2010, after the US recent attempt at health care reform, the RUC seemed to remain the great unmentionable. Even the leading US medical journal seemed reluctant to even print its name.   That <a href="http://hcrenewal.blogspot.com/2010/10/ruc-it-up-how-us-government-fixes.html">changed</a> in October, 2010.  A combined effort by the Wall Street Journal, the Center for Public Integrity, and Kaiser Health News yielded two major articles about the RUC, <a href="http://online.wsj.com/article/SB10001424052748704657304575540440173772102.html">here</a> in the WSJ (also with two more spin-off articles), and <a href="http://www.publicintegrity.org/articles/entry/2571/">here </a>from the Center for Public Integrity (also <a href="http://www.kaiserhealthnews.org/Stories/2010/October/27/AMA-center-public-integrity.aspx">reprinted</a> by Kaiser Health News.) The articles covered the main points about the RUC: its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), how it appears to favor procedures over cognitive physician services, etc.   In 2011, after the "<a href="http://www.replacetheruc.org/">Replace the RUC</a>" movement generated some more interest about this secretive group, and its complicated but obscure role in the health care system, the current RUC membership was finally revealed.  It was relatively <a href="http://hcrenewal.blogspot.com/2011/04/rucing-about-conflicts-of-interest.html">easy for me to determine </a>that many of the members had conflicts of interest (beyond their specialty or sub-specialty identity and their role in medical societies that might have institutional conflicts of interest, and leaders with conflicts of interest).     Then that year a lawsuit was filed by a number of primary care physicians that contended that the RUC was functioning illegally as a de facto US government advisory panel.  It appeared that things might change.  However, it was not to be.  A judge <a href="http://careandcost.com/2012/05/19/medicare-physician-payment-the-rucs-hollow-victory/">dismissed the lawsuit</a> in 2012, based on his contention that the law that set up the RBRVS system prevented any challenges through the legal system to the mechanism used to set payment rates.  The ruling did not address the legality of the relationship between the RUC and the federal government.  The eery quiet then resumed, only punctuated briefly in early 2013, when a <a href="http://hcrenewal.blogspot.com/2013/01/us-senate-subcommittee-asks-what-ruc-is.html">Senate committee held hearings</a> with no obvious effect.       ADDENDUM (15 July, 2013) - see also <a href="http://brodyhooked.blogspot.com/2013/07/the-ruc-revisited-more-corruption-in.html">comments</a> by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog.   ADDENDUM (18 July, 2013) - see also <a href="http://www.nakedcapitalism.com/2013/07/how-the-ama-engages-in-government-sanctioned-price-fixing.html">comments</a> by Yves Smith on the Naked Capitalism blog. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here</a>.) 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

Another Attempt to Show the RUC Behind the Curtain

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08 Jul 2013

US Senate Subcommittee Asks What the RUC is About

It has been a long time coming, but the issue of how the US Medicare and Medicaid system sets the fees it pays doctors, and hence sets the incentives on doctors that drive their health care decisions, finally got some public attention again.  The background is complex, and may glaze the eyes of readers hoping for simple solutions to simple problems.  One wonders if the complexity was deliberately created to discourage solutions.  Yet we have created a complex, obscure, opaque health care system.  If we want to meaningfully improve it, we must address its "inside baseball" qualities.  Those already familiar with and interested in the topic, skip the following section. Background - the Resource Based Relative Value System Update Committee (RUC) We have <a href="http://hcrenewal.blogspot.com/search/label/RUC">frequently posted</a>, first <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here in 2007</a>, and more recently <a href="http://hcrenewal.blogspot.com/2010/07/primary-care-and-hc-renewal-ruc-kus.html">here,</a>  <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>, <a href="http://hcrenewal.blogspot.com/2011/02/replace-ruc.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2011/03/getting-out-of-our-ruc-open-letter-to.html">here</a>, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or <a href="http://hcrenewal.blogspot.com/search/label/RUC">RUC</a>. Since 1991, Medicare has set physicians' payments using the Resource Based Relative Value System (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort they expend, and the resources they consume on particular patient care activities. Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care vs procedures, over time it has had the opposite effect, as explained by Bodenheimer et al in a 1997 article in the Annals of Internal Medicine.(1) A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, and understanding patients' values and preferences when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients. As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members were opaque for a long time, and the proceedings of the group are secret.  As Goodson(2) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review." In fact, the fog surrounding the operations of the RUC seems to have affected many who write about it. We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until 2010, after the US recent attempt at health care reform, the RUC seemed to remain the great unmentionable. Even the leading US medical journal seemed reluctant to even print its name. That <a href="http://hcrenewal.blogspot.com/2010/10/ruc-it-up-how-us-government-fixes.html">changed</a> in October, 2010.  A combined effort by the Wall Street Journal, the Center for Public Integrity, and Kaiser Health News yielded two major articles about the RUC, <a href="http://online.wsj.com/article/SB10001424052748704657304575540440173772102.html">here</a> in the WSJ (also with two more spin-off articles), and <a href="http://www.publicintegrity.org/articles/entry/2571/">here </a>from the Center for Public Integrity (also <a href="http://www.kaiserhealthnews.org/Stories/2010/October/27/AMA-center-public-integrity.aspx">reprinted</a> by Kaiser Health News.) The articles covered the main points about the RUC: its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), how it appears to favor procedures over cognitive physician services, etc. In 2011, after the "<a href="http://www.replacetheruc.org/">Replace the RUC</a>" movement generated some more interest about this secretive group, and its complicated but obscure role in the health care system, the current RUC membership was finally revealed.  It was relatively <a href="http://hcrenewal.blogspot.com/2011/04/rucing-about-conflicts-of-interest.html">easy for me to determine </a>that many of the members had conflicts of interest (beyond their specialty or sub-specialty identity and their role in medical societies that might have institutional conflicts of interest, and leaders with conflicts of interest).   Then that year a lawsuit was filed by a number of primary care physicians that contended that the RUC was functioning illegally as a de facto US government advisory panel.  It appeared that things might change.  However, it was not to be.  A judge <a href="http://careandcost.com/2012/05/19/medicare-physician-payment-the-rucs-hollow-victory/">dismissed the lawsuit</a> in 2012, based on his contention that the law that set up the RBRVS system prevented any challenges through the legal system to the mechanism used to set payment rates.  The ruling did not address the legality of the relationship between the RUC and the federal government.  And then everything was quiet again, until.... A Senate Committee Takes Up the RUC Meanwhile, after the attempt at health care reform made by the Affordable Care Act (aka "Obamacare"), which aimed to increase insurance coverage, there has been growing concern that there will not be enough primary care physicians available to manage the larger insured patient population.  So, as <a href="http://www.washingtontimes.com/news/2013/jan/29/us-shortage-16000-doctors-health-care-act-kicks-in/">reported</a> by the Washington Times, a US Senate committee published a report on this issue: <blockquote class="tr_bq">The United States needs 16,000 more primary care physicians to meet its current health care needs, a problem that will only get worse if nothing is done to accommodate millions of newly-insured residents under President Obama’s health care law in the coming decade, according to a Senate<a href="http://www.washingtontimes.com/topics/senate/"></a> report released Tuesday.</blockquote> Mirable dictu, the report cited the influence of the RUC as part of the problem: <blockquote class="tr_bq">Mr Sanders said some of the blame appears to rest with a board of 31 physicians who make reimbursement recommendations to the Centers for Medicare and Medicaid Services (CMS), which private insurers frequently adopt as well. The American Medical Association's Relative Value Scale Update Committee, or RUC, is populated by many more specialists that primary care physicians, multiple witnesses said Tuesday. 'Therefore, it should come as no surprise that it has accelerated higher payments — larger paychecks — to specialists over primary care doctors,' Mr Sanders' report said.</blockquote> Senator Sanders' subcommittee then held a hearing during which the RUC came up for more criticism, as <a href="http://www.medpagetoday.com/PublicHealthPolicy/WorkForce/37085">reported</a> by MedPage Today: <blockquote class="tr_bq">Sen. Bernie Sanders (I-Vt.), chair of the Senate Health, Education, Labor and Pensions Subcommittee on Primary Health and Aging, criticized the American Medical Association's Relative Value Scale Update Committee (RUC), which develops annual recommendations on physician pay updates for Medicare. Sanders noted that the RUC is dominated by specialists, whose opinions are accepted by Medicare more than 90% of the time. 'Specialists sitting on the committee determine reimbursement rates,' he said during the hearing on the physician shortage<a href="http://www.help.senate.gov//hearings/hearing/?id=dc487385-5056-a032-522c-082a29c4a406" target="_blank"></a> that is anticipated as more people become insured under the Affordable Care Act (ACA). 'We have to look at that.'</blockquote> Several witnesses identified problems with the RUC:   <blockquote class="tr_bq">Andrew Wilper, MD, acting chief of Medicine at the Department of Veterans Affairs Medical Center in Boise, Idaho, told the senators that Congress could mandate further oversight of the RUC and create greater separation between physicians and the boards that dictate their payment rates. 'At a minimum, the public deserves transparency in decision making from the RUC,' Wilper said. 'We should set a process for rate-setting that is not encumbered by conflicts of interest and is not favoring specialties. A rational observer might conclude that the federal government and AMA are plotting to bring an end to the primary care workforce in the U.S.'</blockquote> Also Modern Healthcare <a href="http://www.modernhealthcare.com/article/20130129/NEWS/301299968/senator-plans-bill-to-tackle-doc-shortage">reporte</a>d (subscription required) that Dr Wilper <blockquote class="tr_bq">described the RUC as 'a secretive group of physicians that wield tremendous influence.'</blockquote> Furthermore, <blockquote class="tr_bq">Uwe Reinhardt, economics professor at Princeton University, said in addition to adding primary care physicians to the RUC, the panel needs a third party to perform outside audits of the AMA panel's recommendations</blockquote> However, the AMA was there to provide their usual defense of the RUC, as per Medpage Today, <blockquote class="tr_bq">'The RUC is an independent group of physicians from many specialties, including primary care, who use their expertise on caring for Medicare patients to provide input to CMS [the Centers for Medicare and Medicaid Services],' RUC chair Barbara Levy, MD, said in a statement. 'More than 300 people participate in a typical RUC meeting and information on the panel is <a href="http://www.ama-assn.org/go/rbrvs" target="_blank">publicly available</a>.' Levy noted that 'CMS recently adopted RUC recommendations for the creation of codes to recognize the value of the work, often done by primary care providers, in transitioning patients from one care setting to the next.' The AMA also added two primary care-related seats to the RUC last February: a representative from the American Geriatrics Society and a rotating seat for a practicing primary care physician.</blockquote> Note that this brief response did not add anything to the more voluminous response the AMA made in 2009 to some of my posts on the RUC, all of which were easily countered (look <a href="http://hcrenewal.blogspot.com/2009/06/letter-from-ruc-and-my-reply.html">here</a>).    After the hearing, per MedPage Today, <blockquote class="tr_bq">The problems with the RUC are 'one of the more important issues that arose out of this hearing,' Sanders told MedPage Today after it was over. 'I don't think we have the transparency we need.' Legislation to address the RUC -- as well as other factors exacerbating the PCP shortage -- is expected to come 'quickly' said Sanders.</blockquote> Comments I salute Senator Sanders and his subcommittee for addressing the obscure and often quite <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic topic</a>, getting it some public attention, and at least raising the possibility of a legislative solution. However, this is just a baby step.  The hearing and report generated minimal media coverage (I included links to the most visible above).  Given that Senator Sanders is widely regarded as well to the left of most of his legislative colleagues, the likelihood that any measure he would craft on this would be passed is minimal. Meanwhile, questions we have raised again and again, most recently <a href="http://hcrenewal.blogspot.com/2011/04/rucing-about-conflicts-of-interest.html">here</a> in 2011, remain unanswered.  - How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry. - Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC? - How did the RUC become de facto in charge of this process? - Why does the AMA [keep the membership of the RUC so opaque, and] give no input into the RUC process to its general membership? - Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers? - Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures? Economists have beaten us over the head with idea that incentives matter.  The RUC seems to embody a corporatist approach to fixing prices for medical services to create <a href="http://hcrenewal.blogspot.com/search/label/perverse%20incentives">perverse incentives</a> for physicians to do more procedures, and do less conversing with and examining patients, examining the best clinical research evidence about their problems, and rigorously thinking about how best to help them.  More procedures at higher prices helps physicians who do procedures.  It may help even more the corporations that provide the devices and drugs whose use is necessitated by such procedures, and the hospitals who can charge a lot of money as sites for performance of procedures.  It may even help insurance companies by driving ever more money through the health care system, and thus allow rationalization for higher administrative expenses as a function of overall money flow. Yet incentives favoring procedures over all else may lead to worse outcomes for patients, and more costs to patients and society.  If we do not figure out how to make incentives given to physicians more rational and fair, expect health care costs to continue to rise, while access and quality continue to suffer.   ADDENDUM (1 February, 2013) - see also <a href="http://careandcost.com/2013/02/01/the-ruc-health-care-finances-star-chamber-remains-untouchable/">comments</a> by Brian Klepper on the Care and Cost blog. ADDENDUM (3 February, 2013) - see also <a href="http://theincidentaleconomist.com/wordpress/its-past-time-to-dismantle-the-ruc/">comments</a> by Austin Frakt in the Incidental Economist blog.   References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here</a>.) 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

US Senate Subcommittee Asks What the RUC is About

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31 Jan 2013

BLOGSCAN - Why Not Just Pay Physicians By the Hour?

We have frequently discussed how <a href="http://hcrenewal.blogspot.com/search/label/perverse%20incentives">perverse incentives</a> are spread around health care.  In the US, the physicians are paid according to a system that provides strong incentives for doing procedures, (see <a href="http://hcrenewal.blogspot.com/search/label/RUC">our posts</a> about how the RUC has encouraged this bias towards procedures.)   Since physicians are the most influential "deciders" about the care of individual patients, these incentives encourage overtesting and overtreatment with the highest technology, driving up costs and subjecting patients to increased risks of adverse events.  The recent health care reform law, however, essentially encouraged a version of capitated payment, which might very well provide incentives for undertreatment and undertesting.  For years, Dr Robert Centor has argued logically and forcefully for paying physicians for the time they spend on behalf of payments, very analogous to how lawyers and many other professionals are paid.  This might provide much more neutral, less perverse incentives than would existing or other proposed physician payment schemes.  Dr Centor <a href="http://www.medrants.com/archives/6991">argued again</a> for this seemingly reasonable and logical idea on his DB's Medical Rants blog.  The big question is why this idea has been so <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>?

BLOGSCAN - Why Not Just Pay Physicians By the Hour?

We have frequently discussed how perverse incentives are spread around health care. In the US, the physicians are paid according to a system that provides strong incentives for doing procedures, (see…

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18 Sep 2012

RUCing About - Conflicts of Interest Affecting the Members of the RBRVS Update Committee

Since 2007, we have been <a href="http://hcrenewal.blogspot.com/search/label/RUC">writing</a> about the secretive RUC (RBRVS Update Committee), the private AMA committee that somehow has managed to get effective control over how Medicare pays physicians. The RUC has been accused of setting up incentives that strongly favor invasive, high technology procedures while disfavoring primary care and other "cognitive medicine." Despite the central role of (perverse) incentives in raising health care costs while limiting access and degrading quality, there was surprisingly little discussion about the pivotal role played by the RUC until the formation of the "<a href="http://replacetheruc.org/">Replace the RUC</a>" movement (see post <a href="http://hcrenewal.blogspot.com/2011/03/getting-out-of-our-ruc-open-letter-to.html">here</a>).  Recently, the leaders of Replace the RUC scored a journalistic coup by putting the current list of RUC members publicly on-line.  As we have <a href="http://hcrenewal.blogspot.com/2011/02/replace-ruc.html">discussed</a>, previously the membership of this committee was kept very obscure, although the committee argued it was not exactly secret.  Some Google searching suggests one possible reason that the RUC was in no hurry to disclose its own membership.  It appears that many of the RUC members have significant conflicts of interest with respect to their roles as de facto setters of the rates at which physicians are paid by the government. The RUC Members and Their Financial Relationships Below is the list of the current RUC membership (from<a href="http://careandcost.files.wordpress.com/2011/04/ruc-composition.xlsx"> this link</a>), and relevant conflicts of interest obtained by Google searching.  Note that for each member, I first give the name, affiliation relevant to the RUC, location, and first year of membership as provided by the link above.  Then I list relevant financial relationships that appear to present conflicts of interest. - Barbara Levy, MD Chair, RVS Update Committee Federal Way, WA 2000 Consultant/Advisory Boards: Conceptus; AMS; Covidien; Halt Medical; Gynesonics; Idoman Medical (hysteroscopic surgery and sterilization, endometrial ablation, electrosurgery, vaginal hysterectomy) per <a href="http://www.uptodate.com/contents/obstetrics-gynecology-and-womens-health/peer-reviewers?topicId=226">UptoDate</a> - Bibb Allen, Jr., MD American College of Radiology (ACR) Birmingham, AL 2006 - Michael D. Bishop, MD American College of Emergency Physicians (ACEP) Bloomington, IN 2003 - James Blankenship, MD American College of Cardiology (ACC) Danville, PA 2000 Lecture fees from Sanofi-Aventis per <a href="http://www.nejm.org/doi/full/10.1056/nejmoa0802944#t=article">New England Journal of Medicine</a> - Robert Dale Blasier, MD American Academy of Orthopaedic Surgeons (AAOS) Little Rock, AK 2008 - Joel Bradley, MD American Academy of Pediatrics (AAP) Brentwood, TN 2008 Medical Director, Americhoice by UnitedHealthcare, per <a href="http://www.acopeds.org/meetings/2009fop/2009FoP.pdf">AAP conference brochure</a> - Ronald Burd, MD American Psychiatric Association (APA) Fargo, ND 2006 - William F. Gee, MD American Urological Association (AUA) Lexington, KY 2010 Member, Physician Advisory Board, Aetna <a href="http://www.aetna.com/about-aetna-insurance/initiatives/physician-advisory-board/physician-advisory-current-board-members.html">per Aetna</a> - John O. Gage, MD American College of Surgeons (ACS) Pensacola, FL 1991 - David F. Hitzeman, DO American Osteopathic Association (AOA) Tulsa, OK 1996 - Peter A. Hollmann, MD CPT Editorial Panel (AMA/CPT) Providence, RI 2003 Medical Director, Blue Cross and Blue Shield of Rhode Island, per <a href="http://www.rimed.org/bio-hollmann.asp">RI Medical Society</a> - Charles F. Koopmann, Jr., MD American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS) Ann Arbor, MI 1996 - Robert Kossmann, MD Renal Physicians Association (RPA) Santa Fe, NM 2009 Member of Advanced Renal Technologies Advisory Board, Network 15 Medical Advisory Board, Baxter Home Dialysis Advisory Board, Fresenius Medical Advisory Board per <a href="http://www.renalmd.org/page.aspx?id=1408">Renal Physicians Association</a> - Walter Larimore, MD American Academy of Family Physicians (AAFP) Colorado Springs, CO 2009 - Brenda Lewis, DO American Society of Anesthesiologists (ASA) Cleveland, OH 2009 - J. Leonard Lichtenfeld, MD American College of Physicians (ACP) Atlanta, GA 1994 Member, Physician Advisory Board, Aetna per <a href="http://www.aetna.com/about-aetna-insurance/initiatives/physician-advisory-board/physician-advisory-current-board-members.html">Aetna </a> - Scott Manaker, MD, PhD American College of Chest Physicians (ACCP) Philadelphia, PA 2010 Consultant to Pfizer and Johnson and Johnson. Owns stock in Neose Technologies, Pfizer, Johnson & Johnson, and Rohm and Haas per <a href="http://chestjournal.chestpubs.org/content/134/4/680.full.pdf">Chest</a> - Bill Moran, MD Practice Expense Review Committee Oklahoma City, OK 2000 - Guy Orangio, MD American Society of Colon & Rectal Surgeons (ASCRS) Atlanta, GA 2009 - Gregory Przybylski, MD American Association of Neurological Surgeons (AANS) Edison, NJ 2001 Stock Ownership: United Healthcare (300 shares);  ...  Scientific Advisory Board: United Health Group (B, Spine Advisory Board) per <a href="http://www.nassannualmeeting.org/Documents/AM11_Prelim.pdf">NASS meeting</a> - Marc Raphaelson, MD American Academy of Neurology (AAN) Leesburg, VA 2009 personal compensation for activities with Jazz Pharmaceuticals and Medtronics as a speakers bureau member or consultant per <a href="http://www.marathonmultimedia.com/store/products_pdfs/disclosures/aan10/1FC.001.pdf">AAN</a> - Sandra Reed, MD American College of Obstetricians and Gynecologists (ACOG) Thomasville, GA 2009 GlaxoSmithKline Consulting, $1750 in 2009, $1500 in 2010 per ProPublica Dollars for Docs search through <a href="http://projects.propublica.org/docdollars/">here</a> - Daniel Mark Siegel, MD American Academy of Dermatology (AAD) Brooklyn, NY 2003 Vivacare Dermatology Advisory Board, 2006 – present. Photomedex Scientific Advisory Board, 2006-present, Ad Hoc consultant to ClickDiagnostics, per<a href="http://www.encite.us/pdf/dansiegel_cv.pdf"> Encite CV</a> DermFirst-Shareholder, Logical Image – Consultant, Vivacare - Consultant per <a href="http://www.mohssurgery.org/files/conf/papers/2009%20ACS%20Physician%20Session/SIEGEL-EHR%202014%20is%20Closer%20Than%20You%20Think.pdf">MOHS Surgery</a> - Lloyd S. Smith, DPM Health Care Professionals Advisory Committee Bethesda, MD 2007 - Peter Smith, MD Society of Thoracic Surgeons (STS) Durham, NC 2006 Eli Lilly, Consulting, $1500 in 2009, $1990 in 2010 per Pro Publica Dollars for Docs search through <a href="http://projects.propublica.org/docdollars/">here</a> Advisor or consultant to Bayer per <a href="http://www.medscape.org/viewprogram/7877">Medscape</a> - Susan Spires, MD College of American Pathologists (CAP) Lexington, KY 2007 - Arthur Traugott, MD American Medical Association (AMA) Champaign, IL 2006 - James Waldorf, MD American Society of Plastic Surgeons (ASPS) Jacksonville, FL 2008 - George Williams, MD American Academy of Ophthalmology (AAO) Royal Oak, MI 2009 Advisory Team, <a href="http://www.retro-sense.com/advisors.html">RetroSense Therapeutics</a> Shareholder and consultant for ThromboGenics Ltd. and holds intellectual property on the use of plasmin per <a href="http://www.revophth.com/content/d/retinal_insider/c/26258/">Review of Opthamology</a> Alcon Laboratories, consultant, lecturer; Allergan, consultant, lecturer; Macusight, consultant, equity owner; Neurotech, consultant; Nu-Vue Technologies, equity owner, patent/ royalties; OMIC- Ophthalmic Mutual Insurance Company, employee; Optimedica, consultant, equity owner; Thrombogenics, consultant, equity owner per <a href="http://www.aao.org/meetings/annual_meeting/subspecialty/upload/09-Financial-Disclosures-Subspecialty-Day.pdf">AAO meeting</a> Pfizer, “Professional Advising,” $5534 in 2009 per Pro Publica Dollars for Docs search through <a href="http://projects.propublica.org/docdollars/">here</a> Summary There you have it.  A substantial proportion, almost half, 14 of 29 members of the RUC have financial relationships with pharmaceutical companies, biotechnology companies, device companies, companies that directly provide health care, and health care insurance companies.  As we have noted in our <a href="http://hcrenewal.blogspot.com/search/label/RUC">previous discussions</a> of the RUC, that committee has been accused of being the de facto controller of how the US government pays physicians.  In that role, it has been accused of favoring procedural care rather than cognitive or primary care by increasing the relative financial incentives for the former over the latter.  This may be one of the most important reasons for the expensive, high-technology, procedural-heavy style of care in the US, which has likely been a major driver for increasing costs, declining access and stagnant quality. It seemed obvious that a committee dominated by a majority of physicians who perform procedures would tend to favor bigger financial incentives for procedures.  But now it appears the committee also includes a substantial number of people who work part-time or have ownership interests in companies that also stand to benefit from increasing use of procedures.  Procedures drive increased consumption of drugs, supplies and devices, and lead to larger revenue for hospitals and clinics.  Thus these financial relationships could reasonably be suspected of even further distorting the committee's decision-making in favor of procedures. I was surprised how many RUC members have financial ties to health care insurance companies.  Such companies are not usually thought of as beneficiaries of high-technology, procedural care.  However, if one conceives of their revenue as a percentage of health care costs, perhaps they are.  Furthermore, one can only wonder if the links between the RUC and health care insurance companies have anything to do with how such companies have apparently unquestioningly adapted the RBRVS system controlled by the RUC? The prevalence of conflicts of interest among RUC members highlight the need for a more accountable, transparent and honest system to manage how the government pays physicians, and a need for more transparency and accountability in the relationship among the government, health care insurance, and physicians.  As we have previously <a href="http://hcrenewal.blogspot.com/2011/02/replace-ruc.html">noted</a>,  there are still many unanswered questions about the RUC: - How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry. - Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC? - How did the RUC become de facto in charge of this process? - Why does the AMA [keep the membership of the RUC so opaque, and] give no input into the RUC process to its general membership? - Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers? - Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures? Stay tuned, maybe these will be answered in our life-times....

RUCing About - Conflicts of Interest Affecting the Members of the RBRVS Update Committee

Since 2007, we have been writing about the secretive RUC (RBRVS Update Committee), the private AMA committee that somehow has managed to get effective control over how Medicare pays physicians. The RU…

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26 Apr 2011

BLOGSCAN: Circling the Wagons Around the RUC

On the Care and Cost Blog, Brian Klepper <a href="http://careandcost.com/2011/04/08/the-ruc%E2%80%99s-defense/">suggested</a> that the defenders of the <a href="http://hcrenewal.blogspot.com/search/label/RUC">RUC</a> (RBRVS Update Committee) are getting worried.  He showed that a letter signed by medical specialty societies, but not the major societies that represent generalists, deployed logical fallacies in support of the secretive committee dominated by proceduralists that de facto sets payments to physicians by the US Medicare system, and which seems largely responsible for the gulf between payments for procedures and for primary and "cognitive" care.  His summation: <blockquote>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, <a href="http://www.rottentomatoes.com/m/inside_job_2010/">Inside Job</a>.) 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 <a href="http://content.healthaffairs.org/content/29/5.toc">overwhelming data</a> show produce better care at lower costs.</blockquote>

BLOGSCAN: Circling the Wagons Around the RUC

On the Care and Cost Blog, Brian Klepper suggested that the defenders of the RUC (RBRVS Update Committee) are getting worried. He showed that a letter signed by medical specialty societies, but not t…

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11 Apr 2011

Getting Out of Our RUC - "An Open Letter To Primary Care Physicians"

Getting Out of Our RUC - "An Open Letter To Primary Care Physicians"

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07 Mar 2011

"Replace the RUC!"

We have frequently posted, first <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here in 2007</a>, and more recently <a href="http://hcrenewal.blogspot.com/2010/07/primary-care-and-hc-renewal-ruc-kus.html">here</a> and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or RUC. Since 1991, Medicare has set physicians' payments using the Resource Based Relative Value System (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort they expend, and the resources they consume on particular patient care activities. Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care vs procedures, over time it has had the opposite effect, as explained by Bodenheimer et al in a 1997 article in the Annals of Internal Medicine.(1) A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, and understanding patients' values and preferences when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients. As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret. To expand on the penultimate point, <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">the current page on the AMA web-site that describes the RUC</a> only lists its members in terms of their specialties and organizational affiliation. Their names do not appear. A <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/posesresponse.pdf">response</a> to a <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">previous post</a> by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA <a href="https://catalog.ama-assn.org/Catalog/product/product_detail.jsp?productId=prod1170041">here</a> for a mere $71.95 (although now with the notation that the product has been "discontinued.") However, the book is not on the web, or in my local or university library, and I have no other way to easily access it. Thus, the RUC membership is at best relatively opaque. To expand on the ultimate point, as Goodson(2) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review." The fog surrounding the operations of the RUC seems to have affected many who write about it. We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until 2010, after the US recent attempt at health care reform, the RUC seemed to remain the great unmentionable. Even the leading US medical journal seemed reluctant to even print its name. That <a href="http://hcrenewal.blogspot.com/2010/10/ruc-it-up-how-us-government-fixes.html">changed</a> in October, 2010.  A combined effort by the Wall Street Journal, the Center for Public Integrity, and Kaiser Health News yielded two major articles about the RUC, <a href="http://online.wsj.com/article/SB10001424052748704657304575540440173772102.html">here</a> in the WSJ (also with two more spin-off articles), and <a href="http://www.publicintegrity.org/articles/entry/2571/">here </a>from the Center for Public Integrity (also <a href="http://www.kaiserhealthnews.org/Stories/2010/October/27/AMA-center-public-integrity.aspx">reprinted</a> by Kaiser Health News.) The articles covered the main points about the RUC: its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), how it appears to favor procedures over cognitive physician services, etc. So the RUC became less anechoic.  Now, four months later, there is more news.  A <a href="http://replacetheruc.org/">new site</a> called "Replace the RUC!" has now appeared, with the following introduction: <blockquote>This site has been developed - see here for our backgrounds - to help primary care physicians and other interested individuals obtain verifiable background from reputable sources on: * The evolution and structure of the US' medical payment system. * How it came to devalue primary care and favor specialty services. * How that has translated to lower quality care at far greater expense in the US. We believe the overwhelming majority of American primary care physicians are deeply frustrated with the differences in how primary and specialty care are valued by the current system, and the havoc that system has wrought throughout health care and the nation. The first step to remedying this situation is for the primary care medical societies to visibly and loudly withdraw from participation in the RUC, de-legitimizing the process. That said, this effort is most decidedly NOT primarily about getting primary care physicians more money, but bringing our health system back into homeostasis.</blockquote> We have previously noted that there are many unanswered questions about the RUC: <ul><li>How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.</li><li>Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?</li><li>How did the RUC become de facto in charge of this process?</li><li>Why does the AMA keep the membership of the RUC so opaque, and give no input into the RUC process to its general membership?</li><li>Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?</li><li>Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?</li></ul>We welcome this new site as a way to answer these questions, and more importantly, as a way to develop more rational incentives within the health care system. Note that "Replace the RUC!" will be added to our link list. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here</a>.) 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

"Replace the RUC!"

We have frequently posted, first here in 2007, and more recently here and here, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or RU…

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25 Feb 2011

RUC It Up - How the US Government Fixes Physicians' Payments Becomes Less Anechoic

We have frequently posted, first <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here in 2007</a>, and most recently <a href="http://hcrenewal.blogspot.com/2010/07/primary-care-and-hc-renewal-ruc-kus.html">here</a> and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or RUC.  Since 1991, Medicare as set physicians' payments using the Resource Based Relative Value System (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort the expend, and the resources they consume on particular patient care activities.  Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care, vs procedures, over time it has had the opposite effect, as explained by Bodenheimer et al in a 1997 article in the Annals of Internal Medicine.(1)  A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, understanding patients' values and preferences, when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients.  As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret. To expand on the penultimate point, the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">current page on the AMA web-site</a> that describes the RUC only lists its members in terms of their specialties and organizational affiliation. Their names do not appear. A <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/posesresponse.pdf">response</a> to a <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">previous post</a> by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA <a href="https://catalog.ama-assn.org/Catalog/product/product_detail.jsp?productId=prod1170041">here </a>for a mere $71.95. However, the book is not on the web, or in my local or university library, and I have no other way to easily access it. Thus, the RUC membership as at best relatively opaque. To expand on the ultimate point, as Goodson(2) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review." The fog surrounding the operations of the RUC seems to have affected many who write about. We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until now in 2010, after the US recent attempt at health care reform, the RUC seems to remain the great unmentionable. Even the leading US medical journal seems reluctant to even print its name. That has just changed.  A combined effort by the Wall Street Journal, the Center for Public Integrity, and Kaiser yielded two major articles about the RUC, <a href="http://online.wsj.com/article/SB10001424052748704657304575540440173772102.html">here</a> in the WSJ (also with two more spin-off articles), and <a href="http://www.publicintegrity.org/articles/entry/2571/">here</a> from the Center for Public Integrity (also <a href="http://www.kaiserhealthnews.org/Stories/2010/October/27/AMA-center-public-integrity.aspx">reprinted </a>by Kaiser Health News.)  The articles cover the main points about the RUC: its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), how it appears to favor procedures over cognitive physician services, etc. So the RUC has suddenly become less anechoic. However, despite the best efforts of some very good investigative reporters, there still are important unanswered questions, questions we have <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">raised before</a>: <div></div><div></div><ul><li>How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.</li><li>Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?</li><li>How did the RUC become de facto in charge of this process?</li><li>Why does the AMA keep the membership on the RUC so opaque, and give no input into the RUC process to its general membership?</li><li>Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?</li><li>Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?</li></ul>Without discussing how the incentives for physicians became so unbalanced, do we really expect we can fix them?  If we do not fix them, do we really think we can "bend the cost curve?"  If we do not control our costs, do we really think that we will be able to make good health care accessible for all?  At least now I can say that the issue may really be in play for health care professionals, health care policy experts, and the public at large. See also comments on other blogs: <a href="http://www.medrants.com/archives/5895">DBs Medical Rants</a>, <a href="http://gooznews.com/?p=2012">GoozNews</a>, and <a href="http://www.joepaduda.com/archives/001948.html">Managed Care Matters</a>. ADDENDUM - Additionally, see comments on the <a href="http://mdredux.blogspot.com/2010/10/at-least-some-of-secrecy-of-mysterious.html">Retired Doc's Thoughts blog</a>, and the <a href="http://runningahospital.blogspot.com/2010/10/so-thats-how-rates-are-set.html">Running a Hospital blog</a>. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here</a>.) 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

RUC It Up - How the US Government Fixes Physicians' Payments Becomes Less Anechoic

We have frequently posted, first here in 2007, and most recently here and here, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or RU…

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28 Oct 2010

RUC Off - the New England Journal Once Again Fails to Mention the Unmentionable

Last week, the influential New England Journal of Medicine published an article by Bruce Vladek entitled "Fixing Medicare's Physician Payment System."(1)  Although only identified as working for Nexara, a health consulting business, Mr Vladek was a <a href="http://www.leighbureau.com/speaker.asp?id=128">former administrator</a> of what was then called the Health Care Financing Administration (HCFA) of the US Department of Health and Human Services (DHHS), the part of the department that then ran the US Medicare program.  Vladek thus can reasonably be viewed as an expert on Medicare.  Vladek identified two main problems with the current way physicians are paid by Medicare.  First, <blockquote>Medicare is captive to an arbitrary, if elegantly conceived, formula for total payments to physicians — the sustainable growth rate (SGR). In the alternate reality of the Congressional budget process, the SGR will reduce Medicare's physician payments, which already trail those from private insurers, as far into the future as the eye can see.</blockquote> Second, <blockquote>there is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. That imbalance, in turn, is widely perceived as a major cause of both excessive costs and inadequate quality of care. This is not just a Medicare problem: the Medicare Resource-Based Relative Value Scale is used by most private insurers to set relative prices for physicians.</blockquote> Vladek expanded on the second point as follows <blockquote>the basic mechanics of the Medicare Physician Fee Schedule, which was supposed to change physician payment to increase rewards for primary care services at the expense of procedural and interventional services, appears to have gone totally off track. For various reasons, the fee schedule, which originally did increase the prices of evaluation and management services relative to those of surgery or invasive procedures, turned in the other direction through the process of annual updating of relative value units. Surgeons, radiologists, and some medical specialists are now paid two to three times as much per hour as providers of cognitive services, which is about where we began 20 years ago; this was the situation that the fee schedule was supposed to fix. The question of the relative virtues of primary versus specialty care can be debated ad nauseam, but in other wealthy countries that serve their populations at least as well as we do, the ratio of primary care physicians to specialists is much higher than in the United States, and the gap in compensation is much smaller or the poles even reversed. Young physicians, burdened by increasing educational debts, may well choose a career path on the basis of a major difference in compensation, especially when the better-compensated positions require less ongoing responsibility for patients and offer better working hours.</blockquote> This is about all that Vladek wrote about how the imbalance between how Medicare pays for primary care and other "cognitive services," and for procedures came about. Vladek, and many others have argued that this imbalance has lead to strong financial incentives that have been slowly destroying primary care, and strong incentives that have lead to the use of too many procedures, both strong drivers of rising costs in the most expensive health care system in the world. Vladek noted vaguely that "through various reasons," the incentives were imbalanced by "the process of annual updating of relative value units." However, as we have discussed in several blog posts, a lot more is known about how this process got "totally off track." In fact, in 2007, an article by Bodenheimer et al in the Annals of Internal Medicine explained the problems in considerably more detail.(2)  As we <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">wrote then</a>, Its main points included <ul><li>Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.</li><li>The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."</li><li>Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.</li><li>Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.</li></ul>The role of the RBRVS Update Committee (RUC) is complex and in many ways mysterious.  As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret. To expand on the penultimate point, the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">current page</a> on the AMA web-site that describes the RUC only lists its members in terms of their specialties and organizational affiliation.  Their names do not appear.  A <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/posesresponse.pdf">response </a>to a <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">previous post</a> by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA <a href="https://catalog.ama-assn.org/Catalog/product/product_detail.jsp?productId=prod1170041">here</a> for a mere $71.95. However, the book is not on the web, or in my local or university library, and I have no other way to easily access it.  Thus, the RUC membership as at best relatively opaque. To expand on the ultimate point, as Goodson(3) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review." The fog surrounding the operations of the RUC seems to have affected many who write about.  We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC.  In 2010, post the US recent attempt at health care reform, the RUC seems to remain the great unmentionable.  Even the leading US medical journal seems reluctant to even print its name.  Thus, as we <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">noted before</a>, however, the mysteries about it remain: <ul><li>How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.</li><li>Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?</li><li>How did the RUC become de facto in charge of this process?</li><li>Why does the AMA keep the membership on the RUC so opaque, and give no input into the RUC process to its general membership?</li><li>Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?</li><li>Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?</li></ul>Without discussing how the incentives for physicians became so unbalanced, do we really expect we can fix them?  In this case, the persistence of the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a> seems to be doing real damage to the discussion of the critical issues we in the US face today. References 1. Vladek B. Fixing Medicare's physician payment system. N Engl J Med 2010; 362:1955-1957. (Link <a href="http://content.nejm.org/cgi/content/full/NEJMp1004709">here</a>.) 2. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here.</a>) 3. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310.  (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

RUC Off - the New England Journal Once Again Fails to Mention the Unmentionable

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01 Jun 2010

The Health Care Reform Bill and Health Care Renewal

I have not written much about the seemingly endless health care reform debate in the US, because much of it has not been relevant to the issues we discuss on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>.  Now that the current phase of the debate is done, and legislation has been passed, let me offer my opinions on the few aspects that do seem relevant to this blog. The Sunshine Act For Health Care Renewal readers, the most important part of the legislation is that containing the provisions of the Sunshine Act, championed by Senators Grassley and Kohl.  (See <a href="http://postscript.communitycatalyst.org/?p=1209">this summary</a> on Postscript, the Prescription Project blog.)  The act requires that all drug, device, biologic, and medical supply manufacturers report essentially all payments to physicians or teaching hospitals to the goverment, and on the internet.  It does not appear that the rules apply to other health care related non-profit organizations, e.g., medical schools, disease advocacy groups, health care related charities, medical societies, etc, or to payments made by for-profit health insurers, clinical research organizations, and some other corporations.  Unfortunately, the provisions only take effect in 2013.  However, despite these quibbles, this still may be one of the most important advances promoting disclosure of health care related conflicts of interest made in the 21st century. Comparative Effectiveness Research As best as I can tell at this point, the current legislation used the wording from the bill previously passed in the US Senate, which we discussed <a href="http://hcrenewal.blogspot.com/2009/10/who-should-sponsor-comparative.html">here</a> and <a href="http://hcrenewal.blogspot.com/2009/11/no-free-speech-for-comparative.html">here</a>, regarding comparative effectiveness research.  Although its goal of setting up a not-for-profit comparative effectiveness organization seems laudable, the devil will be in the details.  The Senate version gave considerable oversight of this organization to those with vested interests in selling particular products or services, threatening the impartiality of the organization and the research it would sponsor, and perhaps thus wholly defeating its ostensible purpose.  Furthermore, the Senate bill included curious wording that seems to threaten the ability of those getting funding from the organization to express views that might disturb the organization's leadership, again threatening the integrity of their dissemination of its work, and perhaps violating the First Amendment of the US Constitution.  Whether these provisions provide benefits that outweigh their harms is highly questionable. Payments to Physicians We have criticized how the process of setting payments to physicians by the US Medicare system has been captured by a secretive committee of the American Medical Association that is dominated by physicians who do procedures, the RBRVS Update Committee, or RUC.  The results have been payments for primary care and other cognitive services that have failed to keep up with inflation, a major cause of the continuing decline of generalist/ primary care medicine in the US.  (See most recent post <a href="http://hcrenewal.blogspot.com/2009/06/letter-from-ruc-and-my-reply.html">here</a> about this.)  According to the summary provided by the American College of Physicians (<a href="http://www.acponline.org/advocacy/where_we_stand/access/health_reform_comparisons.pdf">here</a>), the new legislation would enable review of  payments made for specific services, and would reconsideration of the process used to set physician payments by an independent advisory group.  However, the bill would not mandate any changes in payments, or in the processes used to set them, including the pivotal role of the RUC.   So there is some chance that the legislation would lead to a more transparent, accountable, honest, and rational process for setting physician payments and hence eliminating perverse incentives, but no guarantee of such favorable changes. Summary The legislation seemingly will result in one major advance fostering disclosure of some conflicts of interest, and perhaps some progress in terms of reducing perverse incentives generated by Medicare's payments to physicians, and possibly reducing regulatory capture of this process.  It likely will result in more comparative effectiveness research, but how badly it will be biased in favor of vested interests is unclear.  As far as I can tell, the legislation will leave most of the other problems we discuss on Health Care Renewal untouched.  We thus have one or two small steps for mankind, but no reason for complacency. the news is not bad, but we are still a long way from meaningfully addressing concentration and abuse of power in health care.  There will be no rest for the weary bloggers of Health Care Renewal. Also, see comments <a href="http://brodyhooked.blogspot.com/2010/03/now-its-time-to-start-clearing-land.html">here</a> and <a href="http://brodyhooked.blogspot.com/2010/03/along-for-reform-ride-sunshine.html">here</a> by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog. ADDENDUM (25 March, 2010) - Also see <a href="http://alison-bass.blogspot.com/2010/03/shining-light-on-drug-company-shell.html">comments</a> on the Sunshine Act by Alison Bass on the Alison Bass Blog.

The Health Care Reform Bill and Health Care Renewal

I have not written much about the seemingly endless health care reform debate in the US, because much of it has not been relevant to the issues we discuss on Health Care Renewal. Now that the current…

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24 Mar 2010

The Role of the RUC in Medicare's Price-Fixing and Rationing Remains Anechoic

An important part of the noisy and contentious debate about health care reform in the US centers on the role of the government as a provider of health insurance. Some on the left want a government "single-payer" plan to be the only health insurance available. Some left of center want a government "public option" health insurance plan to be available, particularly to those who have trouble obtaining commercial insurance. Some on the right want none of it, and sometimes note that the existing government single-payer plan for the elderly and disabled, Medicare, has important faults that would only become more significant if the plan is extended or duplicated. Yet even critics of Medicare on the right do not seem to want to talk about what may be its worst fault. The latest example, an <a href="http://online.wsj.com/article/SB20001424052970204488304574435464052451436.html">op-ed piece by Dr Scott Gottlieb</a>, appeared in the Wall Street Journal yesterday. Dr Gottlieb's main point was that health care rationing by either government or private insurers is inevitable, but that "government does it in far more byzantine and arbitrary ways." In particular, <blockquote>Consider the $450 billion Medicare program. It provides a model for—indeed its bureaucracy could well end up running—the 'public option' health plan that Mr. Obama wants to offer all Americans under the age of 65. In recent years, Medicare's staff has been aggressively restricting coverage for costly treatments. This often means limiting access to the costliest technologies. To do this Medicare relies on its rationing and pricing systems. </blockquote> Gottlieb then cited several examples, "tortured decisions concerning the use of implantable defibrillators," and "the travails of the pharmaceutical company Spracor and its drug Xopenex, an innovative respiratory medicine that competes with the chemically distinct and much cheaper generic albuterol." Finally Gottlieb decried Medicare's decision making processes applied to costly technologies as "impenetrable." His summation was <blockquote> There's nothing inherently wrong with a program like Medicare seeking value for taxpayers. But it shouldn't make up the rules as it goes. </blockquote> Let me first say that I actually agree with Dr Gottlieb's main points. Any government or private health insurance plan ought to seek value for its money. However, how it does so ought to be rational, based on understanding of medicine and the clinical context, and transparent and accountable to the patients on whose behalf such plans pay. "Covert rationing" (as has been well discussed in the <a href="http://covertrationingblog.com/">Covert Rationing Blog</a>) raises worries that decisions are being made just to save money, not to improve value, and even that decisions are being made without informed consideration of the clinical context, or based on the self-interest of the decision makers, or even that decisions may result from bribery and corruption. But if Dr Gottlieb is so concerned about Medicare rationing care as a result of opaque and unaccountable decision making, why is he not more concerned about how Medicare controls the prices of physicians' services than about its decisions about a few expensive, high-tech and infrequently used treatments? We have written again and again about how Medicare has allowed decisions about what physicians are paid for providing various services to be made de facto by an opaque private committee run by the American Medical Association. This decision-making process has lead to relatively generous payments for procedures, versus miserly payments for "cognitive services," (that is, "evaluation and management services," or for physicians interviewing, examining, and counseling patients, making diagnoses, predicting prognoses, and making decisions about treatment.) The resulting perverse incentives are a major reason that primary care has become increasingly unavailable, and for our expensive patterns of care dominated by high-technology and invasive procedures. More detail quoted from <a href="http://hcrenewal.blogspot.com/2009/06/letter-from-ruc-and-my-reply.html">a previous post </a>appears below. <blockquote>As we have discussed, the US Medicare system determines what it pays physicians using the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/overview-of-rbrvs.shtml">Resource Based Relative Value System (RBRVS)</a>. This system determines the pay for every kind of medical encounter according to a complex formula that is supposed to account for physicians' time and effort, physicians' practice expense, and the cost of malpractice insurance. The components of physicians' effort assessed are, in turn, technical skill and physical effort; the required mental effort and judgment; and stress due to the potential risk to the patient.To keep the system, which was started in 1990, current, requires addition of new kinds of encounters, which means encounters involving new kinds of procedures, and updating of the estimates of various components, including physicians' time and effort. To do so, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee (RUC). The <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RUC</a> is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are secret, as are the proceedings of the group.This opaque and unaccountable process has resulted in increases outstripping inflation in fees paid for procedures, while fees paid for 'cognitive" medicine,' i.e., for primary care, and for services that involve diagnosis, management of acute and chronic disease, counseling, coordination of care, etc, but not procedures, have lagged inflation. The effects of the RUC have been amplified by the unexplained tendency of commercial managed care and health insurance to track the RBRVS system when making their own payments to physicians.For further details about the RUC, see these posts on Health Care Renewal (<a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/05/payments-for-patient-centered-medical.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>) and important articles by Bodenheimer et al,(1) and Goodson.(2) By the way, why the US Center for Medicare and Medicaid Services (CMS) relies de facto exclusively on the RUC to control the RBRVS system, and why the AMA made the RUC into a secret organization apparently beholden only to the organization's proceduralist members are unanswered questions. </blockquote>Our most recent posts about the RUC are <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/06/letter-from-ruc-and-my-reply.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2009/08/sgim-urges-chuck-ruc.html">here</a>. Other bloggers, notably including Dr Robert Centor on <a href="http://www.medrants.com/">DB's Medical Rants</a>, have criticized the RUC. The Society of General Internal Medicine seems to be the only medical society that has criticized the RUC (see <a href="http://hcrenewal.blogspot.com/2009/08/sgim-urges-chuck-ruc.html">this post</a>). Yet even ostensibly conservative and libertarian pundits who decry price-fixing and rationing by Medicare have ignored this vivid and important example of opaque and unaccountable price-fixing and rationing. And ostensibly liberal proponents of public options and single-payer systems have not explained how they would make their rationing more rational, transparent, and accountable, or how simply insuring more patients under Medicare-like programs would not result in even higher costs, poorer access, and worse quality. The lack of discussion of the RUC remains one of the more striking examples of the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>. Failing to address why our costs are so high, are access is so poor, and our quality is so challenged will make it likely that any supposed reform effort will only make these problems worse. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. Link <a href="http://www.annals.org/cgi/content/full/146/4/301">here</a>. 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.

The Role of the RUC in Medicare's Price-Fixing and Rationing Remains Anechoic

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02 Oct 2009

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