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Why Congress Should Pass The Accuracy In Medicare Physician Payment Act

August 9th, 2013

Editor’s note: For more on the debate over the role of the Relative Value Scale Update Committee (RUC), see “In Setting Doctors’ Medicare Fees, CMS Almost Always Accepts The Relative Value Update Panel’s Advice On Work Values,” by Miriam Laugesen, in the May 2012 issue of Health Affairs.

With the recent release of two mainstream exposes, one in the Washington Post and another in the Washington Monthly, the American Medical Association’s (AMA) medical procedure valuation franchise, the Relative Value Scale Update Committee (RUC), has been exposed to the light of public scrutiny. “Special Deal,” Haley Sweetland Edwards’ piece in the Monthly, provides by far the more detailed and lucid explanation of the mechanics of the RUC’s arrangement with the Centers for Medicare and Medicaid Services (CMS). (It is also wittier. “The RUC, like that third Margarita, seemed like a good idea at the time.”)

For its part, the Post contributed valuable new information by calculating the difference between the time Medicare currently credits a physician for certain procedures and actual time spent. Many readers undoubtedly were shocked to learn that, while the RUC’s time valuations are often way off, in some cases physicians are paid for more than 24 hours of procedures in a single day. It is nice work if somebody else is paying for it.

Two days after the Post ran its RUC article on the front page, it reported that the AMA is already visiting Congress in force, presumably to protect its role defining the value of medical services for Medicare. The question now is whether Congress will take steps to remedy the situation.

It won’t be easy. In January of this year, a federal appeals court upheld a lower court ruling, rejecting a legal challenge by six Augusta, GA primary care physicians to CMS’ longstanding reliance on the RUC to determine the relative value of medical procedures. The core of the physicians’ argument was that the RUC is a “de facto” federal advisory committee and therefore subject to the common interest rules associated with the Federal Advisory Committee Act (FACA). FACA requires, for example, that a panel’s composition , say of medical specialists, reflects their distribution in the real world. It also requires that applied scientific methods are credible and that proceedings are conducted transparently.

The RUC has flouted these principles, and operated opaquely. The RUC’s Chair, the AMA’s CEO and 47 medical specialty societies have also publicly dismissed the idea that other stakeholders in the cost process — e.g., patients, purchasers (like health plan representatives) or health care economists — should participate in valuation activities. Their stated view is that only physicians can understand what the rest of us should pay for care.

The court’s ruling effectively meant that the RUC’s position is all but unaccountable and unshakeable. So now we are down to the nub. Only Congress can alter the RUC’s status by requiring it a follow FACA’s rules.

A bill introduced last month by Rep. Jim McDermott’s (D-WA) would require just that, providing an important first step toward fiscal responsibility in American health care. The Accuracy in Medicare Physician Payment Act (HR 2545) would bring the RUC under FACA’s transparency rules, and provide Medicare with external expertise, including from non-physicians, to objectively evaluate the RUC’s recommendations. Passage would be a clear statement by Congress that it seeks an end to special interest favors that have driven egregious levels of health care waste for decades.

Rep. McDermott, a physician himself, has taken a bold position here, but it remains to be seen whether his colleagues will stand by him. No doubt the RUC’s recent negative press has exerted some pressure on Congress to meaningfully address a serious problem for the American people. Getting a bill passed, though, will require overcoming the intense resolve from medical specialty societies and the corporations that support them to maintain their very lucrative status quo.

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5 Trackbacks for “Why Congress Should Pass The Accuracy In Medicare Physician Payment Act”

  1. The RUC (Again): Is there a Light at the End of the Tunnel? A Conversation with Brian Klepper | Care And Cost
    August 19th, 2013 at 5:08 pm
  2. Why Congress Should Pass the Accuracy in Medicare Physician Payment Act | The Health Care Blog
    August 13th, 2013 at 12:27 pm
  3. Why Congress Should Pass The Accuracy In Medicare Physician Payment Act | Brian Klepper, PhD
    August 10th, 2013 at 7:43 am
  4. Why Congress Should Pass The Accuracy In Medicare Physician Payment Act | The Doctor Weighs In
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  5. Why Congress Should Pass The Accuracy In Medicare Physician Payment Act | Care And Cost
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1 Response to “Why Congress Should Pass The Accuracy In Medicare Physician Payment Act”

  1. American Medical Assn Says:

    The AMA convenes an expert group of physicians to provide input to CMS’ decision-makers on the resources required to care for Medicare patients. This committee is the only provider group that has taken the initiative to identify overvalued medical services. To date, they have reviewed about 1,300 potentially misvalued services and recommended reductions to 500 previously overvalued services, redistributing $2.5 billion to primary care and other services.

    But let’s not forget that the Medicare physician payment system is ultimately budget-neutral. There is no financial impact if the government accepts a recommendation for increasing a medical service value because any increase is automatically offset by decreasing values assigned to all other services. It also should be noted that the annual growth in Medicare physician services has been at a historical low for each of the last three years – less than 1 percent – and CMS recently estimated that in 2014, payments from the Medicare fee schedule will cover, on average, less than 55 percent of physicians’ direct practice costs.

    The AMA ensures transparency of the process, making the data and rationale for each committee recommendation publicly available and CMS representatives attend all RUC meetings. And while the committee submits recommendations to CMS for consideration each year, the agency is not obligated to accept them. The general public is also able to comment on individual procedures, and processes are in place to ensure that input from all stakeholders is considered by CMS.

    Learn more by visiting: and

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