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Stifling Primary Care: Why Does CMS Continue To Support The RUC?



May 24th, 2011

Editor’s Note: In addition to Brian Klepper and Paul Fischer (photos and bios above), this article is authored by Kathleen Anne Behan, a skilled trial and corporate lawyer who provides advice to a range of individual and corporate clients. She has 20 years of experience practicing law, including as a partner with Arnold & Porter LLP, and as National Security Litigation Counsel to the American Civil Liberties Union. Her specialties include criminal and compliance law, health care law, employment litigation, and special matters.

Last October, the Wall Street Journal ran a damning expose about the Relative Value Scale Update Committee (RUC), a secretive, specialist-dominated panel within the American Medical Association (AMA) that, for the past two decades, has been the Centers for Medicare and Medicaid Services’ (CMS’) primary advisor on valuation of medical services. Then, in December, Princeton economist Uwe Reinhardt followed up with a description of the RUC’s mechanics on the New York Times’ Economix blog. We saw this re-raising of the issue as an opportunity to undertake an action-oriented campaign against the RUC that builds on many professionals’ work – see here and here – over many years.

We have focused on rallying the primary care and business communities to pressure CMS for change, and are contemplating a legal challenge. But the obvious question is why these steps are necessary. Why doesn’t CMS address the problem directly? Why does it continue to nurture the relationship?

The Negative Consequences Of The RUC

There is overwhelming evidence that the RUC has used flawed and capricious methodologies. It has systematically under-valued primary care and operated without regard for financial conflicts of interest. Its influence has compromised care quality and facilitated the primary care labor shortage. The Chair of the Medicare Payment Advisory Commission (MedPAC) is on record before a Congressional Committee describing its harmful characteristics. We know that the valuations it recommends – and CMS accepts – are major contributors to unnecessary utilization and cost. Former CMS Secretary Tom Scully has publicly condemned it as “indefensible.”

In studying the RUC closely, we have come to believe that the structure of CMS’ relationship with the RUC has violated the management and reporting requirements of a “de facto” Federal Advisory Committee. Meanwhile, the nation generally and publicly funded health care programs specifically are under intense fiscal pressures that have resulted, at least in part, from the runaway health care costs associated with the RUC’s influence.

We have urged mobilizing against the problem, which precipitated energetic responses from the primary care community (as well as the AMA and specialty societies) and prompted the American Academy of Family Physicians (AAFP) Board to reconsider its longstanding participation in the RUC. At the AAFP’s May 5th meeting, the Board decided to continue studying the implications of abandoning the RUC. They intend to announce a final decision before their next meeting in September.

The Crucial Role Of The AAFP

The importance of the AAFP’s consideration cannot be overstated. A major primary care society quitting the RUC, with a public relations campaign that describes its immensely negative influence over care and cost, would almost certainly destabilize the RUC’s relationship with CMS. That would pave the way for a new, fairer, more transparent approach to medical service valuation.

AAFP, the largest primary care society, is the only society likely to be a force for positive change on this issue, at least initially. With about 65,000 practicing family doctor members, about 10 percent of America’s physician population, AAFP is also the “purest.” The “other primary care” societies – the American College of Physicians, the American Academy of Pediatrics and the American Osteopathic Association – are heavily influenced by sub-specialists, whose interests, motivations and compensation are often very different than those of primary care physicians.

The AAFP is moving carefully (as it should), but a decision to abandon the RUC is anything but a foregone conclusion. A sizable contingent of members have demanded that the society leave the RUC – the New Jersey and Florida chapters have both sent letters to this effect, as has the AAFP’s influential National Conference of Special Constituencies – but AAFP’s leaders have hedged their bets. An April 5th AAFP article details President Roland Goertz’ assessment:

“The mechanism for how (Medicare payment) codes are evaluated has contributed to the devaluation of family medicine and primary care through the years,” said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas. He added that it doesn’t seem likely the current RUC process will change this imbalance…

The AAFP is not calling for the elimination of the RUC, said Goertz…He noted that the AAFP has for years asked the AMA to provide more primary care physician representation on the RUC and to provide greater transparency in terms of how the RUC’s votes are taken. “But there does not appear to be movement in that direction,” he said.

Got that? The RUC has, over many years, under-valued primary care. We’ve advocated for more representation and transparency, which the specialists in control refuse. But this process deserves our continued support.

After two decades of declining reimbursement that has gutted primary care’s viability, this fence-sitting should be the focus of every AAFP member. A Board decision to continue enabling the RUC, for fear that the implications might somehow be worse than primary care’s current slow strangulation, should bring into question AAFP’s capacity to represent its members’ interests.

At the same time, we should remember that, like patients, purchasers and the larger American economy, primary care physicians are victims here, not perpetrators. The real culprit is the relationship between CMS and the RUC, which has systematically embedded financial incentives into payment policy for unnecessary and unnecessarily complex procedures, while economically stifling primary care and its inherent ability to moderate unnecessary services.

This is a structural problem that lies at the heart of America’s health care cost crisis, and its impacts are clear. What is not clear is why a massive effort should have to be mounted to correct such an acknowledged blight on our health care system. By addressing the elephant in the room, CMS has an unprecedented opportunity to shortcut the process. It could sever its relationship with the RUC, and establish a new approach to medical services valuation that is more transparent, sound and in the public rather than the special interest.

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14 Trackbacks for “Stifling Primary Care: Why Does CMS Continue To Support The RUC?”

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5 Responses to “Stifling Primary Care: Why Does CMS Continue To Support The RUC?”

  1. LenertMD Says:

    The question is whether the RUC is part of the problem or the solution. We have a healthcare system that is dominated by specialty care, where two-thirds of the physicians in practice as specialists. RUC make up seems to parallel the existing structure of American healthcare, with about two third representation from specialists. In most medical systems in other countries, the ratio of specialists to generalists is reversed–two thirds of physicians are generalists. While it is a leap to assume that generalist led healthcare systems have lower costs and better outcomes, it is a reasonable speculation. What if we rebalanced the RUC so that it looked like the healthcare system we want to create? Shifting the balance of power in the RUC to generalists might lead to eventual shifts in payment mix and, if physicians are creatures of economics, a better ratio of generalists to specialists in our health system, and possibly, better outcomes at the lower costs seen in other societies.

  2. Brian Klepper Says:

    Critical readers would do well to note the obfuscating comment from Alexandra Michel at the American Medical Association. Nowhere in our article do we suggest that the RUC sets Medicare payment rates. That has been CMS’ role, and that agency has failed in its regulatory responsibility by simply rubber-stamping the RUC’s recommendations.

    Our article provides thorough references, as is appropriate for this site. Readers are invited to check out each reference and decide for themselves who speaks the truth here.

  3. james rickertmd Says:

    The RUC thinks of itself as a council of technocrats, but in fact it is a house of representatives (mainly of specialists). That’s a big part of the problem. The other is that the government has outsourced recalibrating the RVUs to the AMA. Why is the CMS not doing the job itself? Part of the answer here is that the AMA own the intellectual property rights to all of the codes and guards them quite carefully. The family physicians must drop out of this arrangement and help us begin again. The RUC is literally killing primary care in this country and overwhelming our country with unneeded specialists and, therefore, unneeded procedures. This has all been studied and well documented. Learn more @
    http://www.thepatientfirst.org/rescuing-primary-care-and-fixing-our-system.html
    James Rickert, MD
    The Society for Patient Centered Orthopedic Surgery

  4. American Medical Assn Says:

    This column makes many claims, but fails to deliver on the facts. The RUC does not set Medicare payment rates for physicians. The RUC does not make recommendations on the amount of government spending that should go to the Medicare program. The RUC is an independent panel of physicians from all medical specialties, including primary care, which operates at no cost to taxpayers and makes recommendations to Medicare on the value of the work and resources involved in patient care. More than 300 attendees, including representatives from all medical specialties, the government and researchers, participated in the last RUC meeting. The March report from MedPAC noted that Medicare payments for primary care services have increased 20 percent since 2006 due in part to recommendations made by the RUC.

  5. Cyndy Nayer Says:

    What I really don’t understand is how we can promote the ACO concept no matter which organization is the “leader” of one, without a clear valuation of the primary care physician and team. Without this, how will we face bundled payments, sharing of risks/rewards, etc., while chronic disease is expanding ? How do we call for new demonstration models through CMS without the accompanying true costs? Or, if we are really supporting the increased personalization or specialization of medicine, which may be another viewpoint, then how do we value the PCP in this environment–is the PCP really just a stepping stone to the care we are actually seeking? To the authors’ point, this may be the actual question: are we looking only for cost cutting measures in health care, or, are we looking for sustainable, predictable costs that rely on early risk reduction and persistence in health promotion/condition management? In other words, let’s not just preserve what exists and expect a different outcome. If we think the PCP is undervalued, let’s rectify it, and those who are affected by the valuation should be loud and clear in their protest. If we think the better answer is through specialization, then let’s put that on the table and consider those implications as well. The answer to this question is the guidepost for how this tension will resolve and who owns the problem. Unfortunately, the tax payers are ultimately burdened with the costs while the contenders develop their strategy.

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