Is the American Medical Association’s (AMA) Relative Value Scale Update Committee, known as RUC, a Federal Advisory Committee (FAC) or isn’t it?
That’s what The Georgia Six, a group of primary care physicians who filed a lawsuit against the Centers for Medicare and Medicaid Services (CMS) on August 5, want a judge to decide.
If the RUC is a FAC, then the entire process used by the AMA to develop the RBRVS (Resource-Based Relative Value Scale) used by CMS to set the Medicare physician fees, will have to change dramatically to comply with the Federal Advisory Committee Act (FACA).
It Walks Like a Duck
The AMA says the RUC is simply an independent group exercising its First Amendment Rights to petition the federal government.
Nope, say the primary care docs. It walks like a duck. Quacks like a duck. Looks like a duck. It should be treated like what it is—a regulatory duck that must meet the requirements of the FACA.
The Spark
Paul Fischer, M.D./courtesy Dr. FischerLast week OTW brought you the details of the lawsuit. But what was the straw that broke the camel’s back for Paul Fischer, M.D., the primary care doc leading The Georgia Six’s assault on the AMA’s unique relationship with CMS? Money and respect
Fischer told OTW that one day a third-year medical student on his family medicine rotation came to see him for a recommendation…to go into dermatology.
The student told Fischer he really liked the work, but just could not afford to go into family practice. Fischer said he realized by “afford, ” the student was referring not only to finances but also to the expectations of his parents, friends, and medical school. “After spending 35 wonderful years as a family doctor, I have been ‘dissed’ by a kid who wants to become a dermatologist, ” said Fischer.
Income Disparity
Who can blame the student? Data from the Department of Labor Statistics and the Medical Group Management Association show that primary care physicians earn a cumulative average lifetime net income of nearly $6.5 million compared with more than $10 million for subspecialists.
Ratio of Average Hourly Earnings for Specialists Relataive to Primary Care
Courtesy of replacetheruc.com
Fischer and his colleagues blame the AMA and CMS for this situation.
AMA: “Don’t Blame Us”
But the AMA says it’s not their fault.
The AMA says CMS is entirely responsible for the RBRVS, where all modifications are made through rulemaking and, unlike RUC meetings, are open to the public.
But at the same time the AMA declares that CMS has recognized the expertise of the RUC by adopting 95% of its work relative value recommendations.
The AMA acknowledges that CMS has observers at each RUC meeting and if a concern is expressed the RUC responds accordingly.
The meetings are not a closed process, says the AMA. The RUC Chairman accepts requests for attendance at each meeting. However, the RUC has a strict conflict of interest policy and does not want the influences of industry involved in the process.
Still, the AMA grants that the RUC activity provides the Medicare program with the ability to issue “timely updates” to the physician fee schedule. “Even with input from an advisory board or consultants, CMS could not replicate the resources to duplicate this process, ” according to the AMA website.
Quack. Quack. The RUC certainly looks like and walks like a duck, suggests Fischer’s lawsuit. If a federal judge agrees, the RUC could be required to abide by FACA laws that require among other things, open meetings, balanced composition and financial disclosures by committee members
Advisory Committee Precedent
There are a couple of recent health care judicial precedents relating to the Federal Advisory Committee Act.
On August 12, a federal judge threw out a government request to dismiss a lawsuit claiming the Obama Administration had violated FACA by setting up a de facto advisory committee of lobbyists from the pharmaceutical industry, the U.S. Chamber of Commerce, the AARP, AMA and others to build support for passing health care reform legislation.
The Clinton administration’s health care reform efforts were also the subject of a suit under FACA. The administration eventually conceded the case and released all the records of committees it set up to work on reform legislation. That suit was brought by the American Association of Physicians and Surgeons.
Quitting the RUC?
The disenchantment by primary care physicians over the perceived favored treatment of their specialty colleagues has been going on for two decades and has brought 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.
Brian Klepper, Ph.D./Courtesy of Dr. Klepper“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.
Brian Klepper, Ph.D. is the Managing Principal of Healthcare Performance Inc., a business development practice based in Atlantic Beach, Florida, and Chief Development Officer for WeCare TLC, LLC, an onsite clinic firm based in Longwood, Florida.
Klepper and David Kibbe, M.D., MBA write there is a more insidious and destructive issue at hand in a July 20, 2011 kaiserhealth.org article titled, “Quit the RUC.”
RUC: Principle Driver of Excess
“The perverse incentives that are embedded in fee-for-service physician payments influence care decisions and are a principal driver of the health system’s immense excesses.
“Encouraged by the RUC, sometimes unnecessary specialty procedures may appear more valuable and appropriate than primary care services. The system pays more for invasive approaches, so conservative treatment choices that are lower cost and lower risk to the patient may be passed over, especially near the end of life. The resulting waste, half or more of all health care dollars, has fueled a cost explosion that has led the industry and the larger economy to the brink of instability.”
Klepper says 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’.”
Klepper told OTW that the RUC is a small group that was able to gin up health care costs to the point of the U.S. spending twice what our nearest industrialized colleagues around the world pay.
Kathleen Behan, the constitutional lawyer who filed the lawsuit for The Georgia Six saw the story and called Klepper. Klepper hooked her up with Fischer and the lawsuit was on.
Courts Over Politics
Fischer says he and the other plaintiffs decided to go to court instead of Congress or CMS because the AMA, which spent $8.5 million lobbying Congress and federal agencies during the first six months of 2011, has built strong ties in Washington.
“We certainly don’t have the money that the AMA has, ” Fischer said, “but we have the law on our side. At some point you have to rely on being right instead of being rich.”
Not surprisingly, the AMA disagrees with Klepper and Fischer about claims of specialty bias.
AMA Defends RUC
On their website, the AMA states, “One of the common criticisms of the RUC has been a purported bias to non-primary care specialties. However, it is important to note that the RUC does not review “primary care” or any specific specialty in terms of relative value. Rather, it reviews the relative value of individual services that physicians perform—regardless of specialty.
“Even as Medicare payments for many physician services have steadily declined over the past two decades, the RUC has taken significant steps to improve reimbursement for services that are performed by primary care including:
Recommended increases in 1995 for evaluation and management services that resulted in a shift of $2.7 billion and net increases for family practice and internal medicine of 2.0% to 2.5%.
The shifting of more than $4 billion to evaluation and management (E & M) codes—which are largely provided by primary care practitioners—from other physician services in the 2007 Fee Schedule.
A 37% increase in the work values associated with an intermediate office visit (CPT 99213), the most frequently billed Medicare physician service for family practice and internal medicine physicians
A 22.5% increase in payments to primary care between 2006 and 2011.
The AMA says that last increase was a result of the RUC recommendations. (Was that a “Quack”?)
Shrinking Pies and Ducks
The health care piece of the federal spending pie is under extreme pressure as Congress looks for spending cuts and a mandated 29.5% cut to physician payments by the end of the year. Is The Georgia Six challenge going to set the stage for other competition between physicians over a shrinking pie? We’ll soon know if the AAFP withdraws from the RUC and if a judge decides the RUC is a duck.
