Brian Klepper and Paul Fischer

Posted 8/9/13 on The Health Affairs Blog

ALP_H_BK_0010Paul FischerWith 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.

Brian Klepper is a health care analyst based in Northeast Florida. Paul Fischer is a family physician in Augusta, GA, and was lead plaintiff in the recent legal challenge to CMS’ refusal to hold the RUC accountable to the public interest requirements of the Federal Advisory Committee Act.