Category: RUC

Special Deal by Haley Sweetland Edwards | The Washington Monthly

Another piece on the RUC. Follow the tags to learn more…

Over the past few years, a few well-placed health care figures from both parties have spoken out—at least once they’ve left office—about how crazy this system is. “The RUC is really just a giant cabal run by the AMA,” Thomas Scully, former head of the CMS under George W. Bush, told me. “A private trade association should not have that sort of control over the biggest spending account in the government. It’s an outrageous travesty of democracy.” Bruce Vladeck, former head of the CMS under Bill Clinton, agrees, calling the RUC “a significant part of the problem.”

There have also been scathing reports issued by the Government Accountability Office, and by MedPAC, the agency that advises Congress on Medicare-related issues, as well as some hard-hitting investigative reporting by the Wall Street Journal and the Center for Public Integrity. In 2011, a bipartisan panel participated in a Senate roundtable, during which three former heads of the CMS took turns lamenting the RUC.

Yet, for the most part, the RUC continues to operate exactly as it always has—behind the scenes, without anyone, including actual doctors laboring in the clinics and hospitals across the country, even really knowing about it. (This spring, Scully told me that he went to lunch with a very high-ranking official at the CMS who had no idea how the RUC actually worked.)

The Affordable Care Act, for its part, includes a few lines that could potentially, if incrementally, limit the RUC’s power. But in general, it doesn’t much change the way the reimbursement system works. Taking on the RUC would have “started a nuclear war with the AMA,” as Scully put it, and alienated other key political allies that the administration needed to pass the law to begin with. Fixing the RUC, however, is essential to fixing health care in this country.

Special Deal by Haley Sweetland Edwards | The Washington Monthly

How a secretive panel uses data that distorts doctors’ pay – The Washington Post

An “expose” on the RUC and physician payment structure. Follow the tag for “RUC” at the bottom to learn more, and “Physician Income” to learn more about what a fair income is, and “IPAB” for a potential solution…

So how much does a physician make on a basic colonoscopy?

A good place to look is Pennsylvania, where the state tracks medical procedures and the profits of the doctor-owned surgery centers.

Even in an otherwise down-at-the-heels former coal town, the procedure can be big business.

At Schuylkill Endoscopy, located in a tidy green building behind the McDonald’s in Pottsville, Pa., three doctors performed thousands of colonoscopies in 2011, taking in more than $700,000, along with hundreds of thousands more for other similar procedures. On top of those physician fees, the endoscopy clinic, which is owned by two of the physicians and a management company, took in $1.5 million in operating profits in 2011, according to state records.

“I am very comfortable — very grateful,” said one of the owner-doctors, Amrit Narula, who lives in a modern-style, 5,000-square-foot house atop a ridge here.

Like other doctors interviewed for the story, Narula noted that he has no role in setting the Medicare value. He does not lobby Medicare and has never filled out one of the RUC surveys. He agreed that the time estimates in his field sound exaggerated.

By itself, the professional fee for a colonoscopy makes him about $260 an hour after his expenses. (That’s a figure that’s based on the clinics’ mix of patients and the Medicare assumptions about overhead.)

Is that too much? In the past, the loudest criticism of the point system has come from primary care physicians who think their work has been undervalued.

The median salary for a gastroenterologist was $481,000 in 2011, according to data from the Medical Group Management Association. By contrast, the median salary for a pediatrician was $204,000 and that of a general internal medicine doctor was $216,000. Those kinds of disparities are leading medical students away from primary care, critics say.

“I didn’t know they got that many RVUs [points] for a colonoscopy — that’s kind of amazing,” said Cynthia Lubinsky, a family practitioner in the next county over from Narula. “Do I believe that the payment system is fair? I would have to say no.”

How a secretive panel uses data that distorts doctors’ pay – The Washington Post

amednews: Bill seeks outside review of relative values in Medicare services :: April 11, 2011

amednews: Bill seeks outside review of relative values in Medicare services :: April 11, 2011:

A Democratic lawmaker has proposed changing the way the Medicare program identifies physician services for which it pays too little — or too much — by requiring independent contractors to review doctor fees annually.

Since 1992, a panel convened by the American Medical Association and representing a wide range of specialties has recommended thousands of pay changes to the individual services doctors provide to Medicare patients. The bill would add a layer of review on top of the 29-member AMA/Specialty Society Relative Value Scale Update Committee, known as the RUC.

Critics of the committee say it lacks transparency and is responsible for continuing payment discrepancies between primary care physicians and specialists. But supporters, including the AMA, disagree. They say the use of outside contractors would be duplicative and add an unnecessary layer of bureaucracy to the process.

The Centers for Medicare & Medicaid Services is required to consult with health professionals on adjusting relative values for services. Because the process is budget-neutral, any value change that results in Medicare paying more for a service means it will pay less for one or more other services. CMS routinely accepts the majority of the RUC’s recommendations, although it is not required to do so.

Rep. Jim McDermott, MD (D, Wash.), introduced the Medicare Physician Payment Transparency and Assessment Act of 2011 on March 30. The bill explicitly would require independent contractors to identify misvalued physician services on an annual basis and recommend adjustments. The national health system reform law already states that the Health and Human Services secretary ‘may use analytic contractors,’ but the new measure would make this mandatory.

‘For two decades now, this panel has been dominated by specialists who undervalue the essential and complex work of primary care providers and cognitive specialists, while often favoring unnecessarily complex, costly and excessive specialty medical services,’ Dr. McDermott said. ‘The result is clear — there is a shortage of family doctors, patients don’t necessarily get the services they need and medical costs are increasingly driven higher.’

Doctors Oppose Giving Commission Power Over Medicare Payments – WSJ.com

Doctors Oppose Giving Commission Power Over Medicare Payments – WSJ.com:

But doctors are objecting to proposals that would allow a federal commission to set the size of Medicare payments to doctors, hospitals and other health-care providers. Under a proposal from White House budget director Peter Orszag, if the president accepted the commission’s recommendations, they would automatically take effect unless Congress acted to block them.
Doctors’ objections to the commission idea highlight the difficulty of maintaining the support of different health-care constituencies when the focus turns to controlling costs.
Surgeons would ‘vigorously oppose’ legislation that gave an unelected executive agency power to set Medicare rates, said the American College of Surgeons, which claims more than 74,000 members, in a letter to House Speaker Nancy Pelosi last week. Several surgical-specialty societies also signed the letter.
The AMA, which claims 250,000 members, said a commission shouldn’t be authorized to set Medicare payment rates for physicians. ‘If the solution is we’re just going to have a big board that will make draconian slashes, that’s not getting at the root cause of what the problem is,’ said AMA President J. James Rohack.

This is interesting. First, reimbursements are virtually set now by an unelected board, the RUC, made up largely of the highly paid, procedure based specialists.

Second, I just heard Chuck Grassley on NPR this morning saying the House and Kennedy Bills did nothing to bend the curve. This is what is required to bend the curve. Put up or shut up. Bending the curve isn’t some magical thing where everyone gets to keep making as much money, on the same trajectory as they do now.

And it’s worth pushing back on the AMA in particular. They’ve been talking a good game about what needs to be done to improve health care, reluctantly (because of fear of retribution, I suspect) pointing out whose oxen to gore, but they’ve been very silent about what physicians will be required to give up in all of this.

I frankly don’t expect to have to give up much, (I’m 49) and what I do give up will occur over ten to twenty years and so accommodation will be made by the “youngsters,” those going into and coming out of medical school and residencies now). They are the the physicians who will actually be affected by this. The old guys pissing and moaning are ready to retire soon, so shouldn’t be holding the country hostage to their reactionary, out dated ideas of what medicine should be about.

UPDATE: I was researching Medcare for a talk on the 44th anniversary of the program, and it is worth mentioning that one of the things LBJ had to do to pass Medicare was to cave to the American Medical Association and American Hospital Association, essentially giving them whatever was required to stop opposing the legislation. This had good and bad effects: lots of hospital construction, advances in medicine, and huge revenue boosts for hospitals and doctors.

On principle, we should not cave to get reform, but on a pragmatic level, fear works and the erosion in support for reform is evidence of that. But let’s call BS, at least, on Grassley and the other reborn deficit hawks: If you want to bend the curve, then you have to make some tough choices.

Health Care Renewal: A Letter from the RUC, and My Reply

Health Care Renewal: A Letter from the RUC, and My Reply

This is a terrific, comprehensive review of the committee that places value on the things physicians bill for.

It is clear why procedure based specialists do so very, very well, and primary care docs constantly get the short end of the stick.

Health Beat: The AMA Would Make Health Care Unaffordable for Many Americans

Health Beat: The AMA Would Make Health Care Unaffordable for Many Americans:

“The American Medical Association has announced its opposition to a public-sector health plan that would compete with private insurers. Why? Because the AMA fears that Medicare E (for everyone) might not pay some specialists as handsomely as private insurers do now.

“Why do private insurers pay more? Because they can pass the cost along to you and I in the form of higher premiums. Medicare E has no one to pass costs on to—except taxpayers. And taxpayers will already be helping to subsidize those who cannot afford insurance.

“Everyone agrees that primary care physicians are underpaid. Democrats in both the House and the Senate propose raising their fees, as does the Medicare Payment Advisory Commission (MedPac)—the group that might take over setting fees for Medicare. Moreover, the House, the Senate, President Obama and MedPac have made it clear that they do not favor the across-the-board-cuts called for under the sustainable growth rate (SGR) formula. Congress has consistently refused to make those cuts and President Obama did not include them in the 2010 budget that he originally sent to Congress. On that score, the AMA has nothing to worry about.

“Protecting Excessive Fees for Some Specialists’ Services

“So what does the AMA fear? That either MedPac or Medicare will trim fees for certain specialists’ services. Keep in mind that Medicare’s fee schedule has traditionally been set –and adjusted on a regular basis, by the RUC– a committee dominated by specialists.( Private insurers then follow that fee schedule, usually paying somewhat more for each service.) I have described this group in the past: They meet behind closed doors. No minutes are kept of their meetings. They rarely suggest lowering fees—even though as technology advances, some services become easier to perform. MedPac has pointed out that a less biased group should be involved in determining fees—perhaps physicians who work on salary, and are not affected by Medicare’s fee schedule.

“There is good reason to suspect that the RUC has over-rated the value of some services.. MedPac has suggested taking a look at particularly lucrative tests or treatments that are being done in large volume. Often, this may mean that patients who don’t need the service are receiving it; if the procedure isn’t necessary, then, by definition, they are being exposed to risks without benefits. And in fact, experience shows that when high fees are trimmed, volume falls, suggesting that rich fees were, in fact, driving overtreatment.”

There is more here about using medicare to “bend the curve,” or reduce over-utilization, improve use of preventive services, as well as a discussion of how a Public Plan might besubsidezed, etc. well worth reading, particularly about subsidization.

I would only add that the title falls a bit short: The AMA, or rather, conservative physicians, are hardly the only group fighting significant change. The Health Insurance industry, despite conciliatroy noise, will be the big guns or long knives as this goes forward. And behind them will be Pharma, other device and equipment manufacturers, probably home health servicers, ambulatory care centers, and, for purely ideological reasons, all conservatives.