Wednesday, January 14, 2009

Have you been RUCed?

Roy Poses, MD, takes on the RUC in the Health Care Renewal blog.

He calls the RUC an "opaque and unaccountable process [that] 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." In a similar vein, Dr. Bob Centor (a member of the ACP Board of Regents), partly blames the RUC for the shortage of primary care doctors. And Drs. Berenson, Bodenheimer, and Rudolf wrote this in an Annals of Internal Medicine Perspectives:

"The RUC process favors increases in procedural and imaging reimbursement for 3 reasons: specialty society influence in proposing RVU increases, the specialist-heavy RUC membership, and the desire of RUC specialists to avoid increases in evaluation and management RVUs. With their ability to create new codes and influence RVU updates, many procedural specialists can influence fees in a way that observers find to substantially overvalue procedural and imaging services. Moreover, high fees may encourage physicians to increase the volume of profitable services, leading to even higher income gains and greater spending growth."

The RBRVS Update Committee (RUC) is a panel of physicians hosted and chaired by the American Medical Association and made up of representatives from major physician specialty societies, including ACP. The RUC provides recommendations to the Centers for Medicare and Medicaid Services (CMS) on the physician work relative value units (RVUs) under the resource-based relative value scale. A simplified expression of the formula that CMS uses to set Medicare physician payment rates goes like this:

Physician work RVUs x Practice Expense RVUs x Professional Liability RVUs x $ multiplier = payments

The RUC provides advice mainly on the first piece - physician work RVU. This represents about 55% of the total RVUs for each procedure code. CMS accepts most of the RUC's recommended RVUs.

The RUC argues it is being unfairly maligned. Dr. Bill Rich, the RUC's chair, wrote this in response to the Annals of Internal Medicine:

"The RUC recommended significant increases to E&M (evaluation and management) services, which were implemented by the CMS on 1 January 2007. These permanent increases result in an additional $4.5 billion in E&M services payments each year! To imply that they are small and insignificant is preposterous. Family physicians may see their overall Medicare payment increase by 5% or more. A document on the American College of Physicians' Web site states: 'ACP estimates that internists will typically see an increase of $5,000 to $10,000 in total Medicare allowable charges'."

My sense is that the RUC's critics have a point, but so does Dr. Rich. The RUC deserves credit for the evaluation and management increases, and more recently, for estimating the physician work involved in care coordination for the Medicare medical home demonstration project.

But the RUC does need to look at its own composition and processes. It needs to be more representative of primary care and more transparent in its deliberations. The new Obama administration and Congress would be well-advised to insist that the processes Medicare uses to determine the values of physician services be as transparent as possible, and include sufficient and appropriate representation and expertise from primary care. They should also require a better process for identifying overvalued services.

But making the RUC the main villain in a system created and run by the government misses the mark. We have to remember that it is Congress and CMS, not the RUC, who makes the rules. As long as the Medicare payment system pays based on volume instead of rewarding prevention and care coordination, primary care physicians' incomes will lag behind specialties that can generate more volume, because primary care doctors can only increase volume by cramming more patients into an already over-scheduled day. This would be true even if the RUC were reconstituted to include more primary care doctors.

And, we need to ask if the RUC were to disappear, who should recommend the work involved in physician services? Economists and physicians hired by the federal government?

Today's questions: What do you think about the RUC? Does it need to change? Or should it be replaced- if so, with what?


Jay Larson MD said...

As a general internist watching internal medicine extinction, I’m not pleased with the RUC’s decisions. The RUC is not a government agency. It is a group of physicians from the AMA exercising their constitutional right to petition the government. The RUC consists of about 26 members of which 3 are primary care. MedPAC will accept the RUC’s recommendation about 95% of the time. There is no transparency on RUC decisions. Yes, E and M value was increased for CPT codes 99213 and 99214, but this increase benefited ALL physicians that see patients in the office, including procedurally based physicians. This increase in Medicare allowable charges were easily consumed by higher overhead generated by Medicare part D. The multiple random formularies, prior authorization requests and medication denials drew physician and staff away from patient care so that Medicare patients received their prescribed medications.

The AMA principles of medical ethics states that “The Medical profession has long subscribed to a body of ethical statements developed primarily for the benefit of the patient. As a member of this profession, a physician must recognize responsibility to patients first and foremost, as well as to society, to other health professionals, and to self”. “A physician shall support access to medical care for all people.” “The ethical obligations of physicians are not suspended when a physician assumes a position that does not directly involve patient care”. “When physicians make decisions in non-clinical roles, they should strive to protect the health of individuals and communities.”

Even though the AMA states that the RUC is not “dominated by proceduralists who do not understand the challenges faced by primary care physicians”, why is it that primary care, especially general internal medicine is heading towards extinction? Why is it that the CPT code book contains only 35 pages of Evaluation and Management services guidelines but over 400 pages of procedure codes? Why is it that procedures are reimbursed at a much higher level than cognitive visits for the same time utilized?

It is not time for the RUC to disappear. It is time for MedPAC and other insurances not to listen to them. People with medical expertise without conflict of interest should revamp the value of the health care system.

Roy M. Poses MD said...

We have written quite a bit about the RUC on Health Care Renewal. Our first post, which contained the most detail about the RUC and RBRVS system itself, much of it based with attribution on Bodenheimer et al's excellent article in the Annals of Internal Medicine [Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306.], was here:

The RUC may say that all it provides is advice, but that advice is almost always uncritically accepted by CMS. Per the also excellent article by Goodson [Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310] the AMA itself claims that CMS follows more than 90% of the RUC's "recommendations."

The RUC did very belatedly recommend some increases in evaluation and management codes, but these hardly made up for its years of neglect of primary care (to use polite terms), and this increase, as Dr Larson pointed out, benefited all physicians, not just primary care, or cognitive specialties, to the extent it was not nullified by across the board cuts necessitated by the SGR.

How well the RUC did in the case of the proposed medical home is unclear. See this post and its links to a serious critique of this work:

I surely agree that the RUC ought to be more representative of primary care and more transparent. As noted in Dr Goodson's article, primary care has had a very small representation on the RUC. There is not a single designated seat for general internal medicine, but orthopedics effectively has two (one for orthopedics, one for spine surgery, which has a separate society).

Note further that many of the specialty societies that support RUC members are supported heavily by industry, that is, by pharmaceutical, biotechnology, and device companies. Such corporations benefit from irrational exuberance about procedures, since they sell the drugs, devices and supplies that are used in procedures. See these posts, for example, on some of the industry sponsorship of the AAOS, which sponsors an "orthopedic" seat on the RUC:

Such institutional conflicts of interest affecting the RUC have never been publicly discussed.

The transparency issue is not trivial. The identities of the people who sit on the RUC have been SECRET. A few members have admitted publicly that they are, but the AMA - I'll say it again - keeps the membership roster of the the RUC secret. One wonders what they have to hide. Not only is the membership secret, of course, but the group's deliberations are also secret.

It is the privilege of the AMA, a private group, to keep the membership of the RUC secret. But I would note, that secret is also kept from the general AMA membership, who are presumably paying their dues to support this secret committee.

On the other hand, since the RUC functions as a de facto government agency (note again that CMS seemingly gets input from no other source for its revisions of RBRVS), having such important government decisions, which have nothing to do with national security, made in secret is offensive.

It is true that Congress and CMS made the rules that allowed all this to happen. There are very big questions about why CMS pursued this course. Maybe some investigative reporter, some congressional agency, or in a new administration, CMS itself will investigate how this happened.

But the AMA did not have to go along with it. They could have insisted on an open, transparent, representative, accountable process, and refused to participate were that not allowed. Instead, they at least went along with a fee setting process that is opaque, unrepresentative, unaccountable, and not obviously subject to any ethical standards.

The RUC should disappear. Medicare should develop an open, transparent, representative, accountable process to negotiate what it pays physicians. The names of the people involved should be public. The people involved should be free of obvious personal conflicts of interest, and should not be sponsored by organizations with obvious institutional conflicts of interest.

gladtohelp said...

Solving the RUC problem is easy in one respect: there is no legal reason why CMS can't suddenly cease to pay attention to the RUC's recommendations. This could happen tomorrow (or more likely, after January 21). The RUC has no statutory power.

There are at least two reasons why CMS so slavishly follows the RUC's recommendations. First, CMS administrators are in no hurry to draw political fire. Second, CMS is tragically under-resourced and understaffed. For CMS to update the RVUs on its own would require investment.

History offers a nice parallel. Decades ago, the AMA regulated pharmaceutical products. Now we have the organization with its faults to be sure, but a vast improvement.

It's time to follow suit with determining physician payments. This job is too important to be left to people who have huge personal financial stakes in committee decisions. The composition of MedPAC is a good model for the kinds of people who should be determining physician pay.

A new, open, and accountable physician payment policy body could be established within or outside CMS. There would be no reason to do anything to the RUC directly. The RUC could continue to submit payment recommendations as long as the AMA wants, and CMS could simply ignore these.

james gaulte said...

The elephant in the room is the wage and price controls administered by CMS.Wage and Price controls typically lead to at least two things,poorer quality services and shortages.Primary care had been hit harder by the controls and shortages are appearing there first.

Vince Kuraitis said...

The RUC methodology inherently perpetuates a win/lose economic model between primary care physicians and specialists.

Pull the RUC out...

rcentor said...

I posted a response to this on my blog -

Unknown said...

As a dues paying member of the ACP, would really like to know the credentials, name and specialty of the ACP representative on the RUC. Afterall, makes sense to get to know the guy who is speaking for me on the 'secret' panel