Repost. Original post at the above link.
Guest post by Thomas Kim, MD, HSPH 2014
Physician pay in the current fee-for-service model is determined by many factors, but an important starting point is the Resource-based Relative Value Scale (RBRVS). The RBRVS was established as the methodology for Medicare payments in 1989. A key component of the methodology is the value, measured in relative value units (RVUs), of the service rendered.
In order to advise Centers for Medicare and Medicaid Service (CMS), the American Medical Association (AMA) established an expert panel called the Specialty Society Relative Value Scale Update Committee, abbreviated as “RUC”. It assigns RVUs for every Current Procedural Terminology code that clinicians use. CMS accepts their valuations about between 90% and 99%, of the time. The established Medicare fee rates go on to become benchmarks in doctors’ contracts with private insurers. RVUs are also frequently used when calculating reimbursement for salaried physicians.
The RUC is criticized for a number of reasons.
· First, it’s secretive. All members sign a nondisclosure agreement and voting is opaque to the public. Only in 2009 did they begin to reveal the names of its members.
· Second, it’s dominated by specialists. Some feel it consequently slights the relative value of primary care. (Of 31 current members, 25 practice specialty care. A 2/3 vote is required on any recommendation to CMS.)
· Third, and most important for managing healthcare costs, it too easily overlooks gaming of the system by the clinicians who do procedures. It can result in higher prices throughshifting the location of care, and it drives up utilization: a doctor can claim more hours of work than the RVU system purports to be plausible.
Whenever new criticism is released, the AMA is exceedingly quick to reply and to claim the RUC acts fairly and with great consideration to primary care, pointing to CMS’ high adoption rate as, instead, a sign of its credibility. Finally, its most ardent critics attack the RUC as simple anti-trust abuse and price-fixing.
Reform at various levels has been attempted, but with relatively little success:
Some have advocated for changes within the RUC – changing the doctor mix to include more primary care, being more inclusive of non-physician opinions, or greater transparency in proceedings. The RUC, in response, only added one seat for geriatrics and one rotating primary care seat. One organization, the American Academy of Family Physicians, seriously weighed the option of abandoning their seat on the RUC in protest, but chose to stay. It was deemed too risky since the RUC is the only proverbial table, and enough publicity wouldn’t have been generated to sway American opinion or delegitimize the RUC.
Others have advocated for CMS not to take its recommendations at face value so frequently. MedPAC has recommended since 2006 the establishment of an additional independent panel to supplement the RUC’s recommendations.
In 2011, six PCPs went to the courts to challenge the CMS’ reliance on the RUC, claiming the RUC should be subject to the federal laws which require adherence to public interest rules including ones surrounding transparency. It was dismissed on procedural grounds.
Finally, two authors proposed improving the current RVU schema to include a value component in order to add weight to services where evidence supports its comparative-effectiveness. Unfortunately, they offer no political route or strategic path for this methodology to be introduced.
Ultimately, the political landscape of the country makes it difficult to change this deeply flawed system. The AMA has fervently opposed drastic changes. Other proposed independent panels have been aggressively attacked in the media as “death panels”. A bill introduced in Congress this June by Rep. Jim McDermott (D-WA), H.R. 2545, would establish an independent expert panel within CMS to assess the RUC’s appraisals. It has the support of the ACP and AAFP, but is thought to have little chance to get past committee.
In an ideal world, a profession would self-regulate with careful consideration for the social value it adds, without the need for heavy government oversight. In the absence of this, however, we have arrived at payment schemes that do not valuate high value services highly and instead drive up costs.