The RUC’s Empty Gesture

Brian Klepper and Paul M. Fischer

Posted 5/11/12 on Medscape Internal Medicine

Recently, the leaders of the American College of Physicians (ACP) and the American Geriatrics Society (AGS) lavished praise on the American Medical Association’s Relative Value Scale Update Committee (RUC) for announcing the addition of a rotating primary care seat and a permanent geriatrics seat, and for promising to post vote tallies. Welcoming these maneuvers indicates not only a poor understanding of history but also misguided political and strategic instincts that will continue to harm patients, purchasers, and primary care physicians.

Over the past 15 months, we have spotlighted the RUC’s secretive, self-interested mechanisms. Along with 5 primary care colleagues, Dr. Fischer has sued the Department of Health and Human Services (HHS) and the Center for Medicare & Medicaid Services (CMS) over the fact that despite their long-standing nearly sole-source reliance on the RUC for the valuation of physician services, they have refused to require it to adhere to the stringent legal requirements associated with the Federal Advisory Committee Act (FACA).[1]

FACA ensures that regulation is formulated in the public rather than the special interest. Among other things, it requires that the composition of federal advisory bodies reflect the real world. Their proceedings must be open, transparent, and free from conflict of interest, and their scientific methods must be credible. The RUC follows none of these requirements.

By adding 2 seats, the RUC membership grows from 29 to 31, and from 2 cognitive medicine seats (7% of the votes) to 4 (13%). The balance of power does not change. Although primary care doctors comprise about one third of US physicians, the additions do nothing to more accurately reflect real-world numbers.

The vote tallies presumably will not provide information about how individual panelists voted, so there really is no meaningful transparency.

Nor do the new seats do anything to address the RUC’s other flaws. Although CMS has historically accepted more than 90% of its recommendations with no further diligence, affecting the distribution of trillions of public dollars each decade, the proceedings of its meetings remain secret. While it professes objectivity, Barbara Levy, MD, the RUC’s Chair, admits, “We assume that everyone is inflating everything when they come in. They are wanting to fight for the best possible values for their specialties.”[2]

Some panelists have consulting agreements with healthcare firms that could benefit from the votes. Dr. Levy insists that, in practice, members recuse themselves from votes when appropriate. But because the proceedings are closed, we’ll have to take her word for it.

The RUC’s valuations consider physician surveys. The RUC has used as few as 30 survey responses to make recommendations, and medical societies, intent on optimizing value and reimbursement for their members, openly encourage their members to respond.[3] None of this would pass muster in an entry-level college course on survey methods.

Over time, the RUC has had 4 massive real-world results. It has consistently overvalued specialty services while undervaluing primary care. The erosion of primary care reimbursement, relative to specialty payment, has doubled specialty referral rates over the past decade and weakened the moderating influence of primary care over specialty care, fueling more utilization and higher healthcare costs. The overvaluation of many specialty services has created financial incentives for doctors to deliver more services, and more expensive ones. And the increasing gap between primary and specialty care income has driven the primary care labor shortage.

These dynamics have been at the heart of the cost crisis in US healthcare, which in turn siphoned off 79% of workers’ income gains in the decade preceding 2009.[4] They have been the largest driver of America’s rapidly declining global competitiveness and growing budget deficit.

The RUC is a nearly pure example of “regulatory capture,” in which an industry comes to control the governmental processes that should be overseeing it. It needs to be replaced by a far more accountable, more transparent, properly representative, and less conflicted advisory body that follows FACA guidelines. That panel should be expanded to include other important constituencies, such as patients, purchasers, and health economists. In addition, CMS should immediately begin to recalibrate over- and undervalued procedures.

It is reasonable to suggest that the RUC’s sudden magnanimity is due not to enlightenment or the efforts of the ACP or AGS (which the RUC disregarded for the previous 20 years), but to the increasing glare of visibility and scrutiny. The danger here is that the courts will interpret this action, as these societies’ leaders have, as a course correction and a step forward, rather than what it is: the cynical creation of an illusion of action.

Finally, it is critical that the leaders of cognitive medicine societies lose their desperate desire to be at the AMA’s table. Over the past 20 years, the RUC has had a disastrous influence on US medicine and the nation’s economy. Only by publicly quitting the RUC can physicians delegitimize its role and put healthcare back on a healthier path.

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About Brian Klepper

Brian Klepper is a health care analyst, commentator and a Principal in Worksite Health Advisors.
This entry was posted in Brian Klepper, Payment Reform, Primary Care, Regulatory Capture, RUC and tagged , , , , , . Bookmark the permalink.

One Response to The RUC’s Empty Gesture

  1. Jon says:

    Why don’t we hear about this on television more? I just heard about it on npr today… I would like to see the two candidates for president asked about this during the debates..

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