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Policy Watch: Is the RUC Broken? Neurologists Question System for Establishing Medicare Payments

Shaw, Gina

doi: 10.1097/01.NT.0000391393.28469.0f
Departments: Policy Watch
NEUROLOGISTS ASK: Are neurology's interests well represented on the American Medical Association-convened panel of physicians that advises Medicare on how to spend the more than $60 billion a year it pays physicians?

NEUROLOGISTS ASK: Are neurology's interests well represented on the American Medical Association-convened panel of physicians that advises Medicare on how to spend the more than $60 billion a year it pays physicians?

Two recent articles in the Wall Street Journal (WSJ) drew back the curtain on the Relative Value Scale Update Committee — commonly known as “the RUC”— the American Medical Association-convened panel of 29 physicians that meets three times a year in order to advise Medicare on how to spend the more than $60 billion a year it pays physicians.

First formed in 1991, the RUC is basically charged with determining approximately how much of a physician's time a given service takes, and therefore how much he or she should be paid for it. The Centers for Medicare and Medicaid Services (CMS) don't have to follow their recommendations — but they usually do.

As the WSJ revealed, the RUC estimates are often significantly out of line with current practices. Their analysis “… found more than 550 doctor services that, despite being mostly performed outpatient or in doctors' offices in 2008, still automatically include significant payments for hospital visits after the day of the procedure, which would typically be part of an inpatient stay.”

An accompanying article noted that, over the past 20 years, these determinations have inexorably moved toward rewarding procedures and surgeries, while providing less and less compensation for evaluation and management-type services, such as those most often performed by general internists, family practitioners — and neurologists.

The reason why is clear when you look at the composition of the RUC. In addition to a chair and six AMA-committee representatives, there are 23 voting members representing different specialty societies.

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The vast majority of the specialties — each of which gets one vote in the RUC's secret balloting, no matter how many practicing physicians their specialty represents — are procedural or surgery-focused specialties.

“Now, when you're sitting at the RUC table, you aren't supposed to be representing your specialty,” said Bruce Sigsbee, MD, AAN president-elect and the first AAN representative to the RUC, who sat on the committee for approximately 10 years. “If one of your specialty's codes comes up, another physician presents the data to the committee. Nonetheless, it has evolved that people have become very much advocates of their own specialty irrespective of the fairness that is supposed to guide the RUC.”

As a result, Dr. Sigsbee said, the procedural specialties that dominate the seats have gained ground in compensation. “Meanwhile, the groups that primarily depend on E&M services have fallen behind in terms of the valuation of codes,” he said.

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Originally, neurology wasn't even supposed to be represented on the RUC. When it was first formed, representatives were requested from all the American Board of Medical Specialties-certified specialties except neurology. “I'm not sure why,” Dr. Sigsbee said. “But after several years, the selection criteria came out, and I initiated a campaign that was ultimately successful, so we became one of the specialties sitting at the table. Neurology remains the only specialty that has successfully been added to the RUC since its inception.”

So neurology has a seat at the table — but it's only one seat. And like internal medicine, family medicine, and other specialties that spend a lot of “face time” with patients but not a lot of time in the operating room or doing procedures, neurologists have lost ground in the valuation of their work over the last two decades.

Consider, “for example, all these non-invasive laparoscopic procedures,” said Dr. Sigsbee. “When things like these are new and people are struggling with doing them, they tend to be evaluated at a relatively high level and then never get adjusted down when people become familiar with them and it's something they can do easily. Almost every specialty around the table does some kind of laparoscopic procedure, and they tend to be valued very highly. But neurology doesn't do these kinds of procedures. There's an inherent problem with the fee schedule if neurologists and primary care doctors are working just as hard as procedural specialists and still losing ground.”

And recently the RUC has agreed that certain databases, such as the Veterans' Affairs (VA) database, be accepted as a form of support for the time it takes to do surgical procedures. “Those databases aren't available for those who do E&M services,” said Dr. Sigsbee. “And the VA is also run in such a way that income is not dependent on productivity, so the times for procedures tend to be longer, so again, procedural specialties will benefit from that.”



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J. Baldwin Smith, MD, who represented neurology on the RUC from 2001 through 2007, agrees that the RUC system is inherently flawed. “Having an expert panel is, I believe, biased, unfair, and wrong,” he said. While praising the professionalism of the AMA and society staff who work on the RUC, as well as the panel members — “physician's physicians,” he called them — Dr. Smith noted that “it's human nature not to share. These are wonderful people, but do you think the majority will give up some of their relative power to share with others in an equitable manner?”

“The RUC does a great job most of the time,” said Dr. Smith. “But there's no question that it's biased. It creates problems for physicians who are performing patient-oriented services that primarily involve E&M codes not linked to a post-op service — cognitive services, like neurology.”

Neurologists are battling against devaluation of their work on multiple fronts. This year, the CMS eliminated payment for consultation codes 99241–99255, substituting certain E&M codes instead. As a result, according to a survey by the AMA and 11 medical specialties, including the AAN, some 72 percent of physicians responding to a survey have seen their total revenue decline by more than 5 percent. [For more on the survey, see Neurology Today's Aug. 5 article, “Eliminated CMS Consultation Codes Affect Neurology Bottom Line,”]

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If there's no change, said Dr. Smith, “there are questions we have to raise. Who will be the primary care physicians? What will happen to cognitive specialists like neurologists, family practitioners, and gerontologists who do no significant procedures or surgery and are primary E&M based? That's what we need today, but that's not what we're valuing.”

He urges that the RUC be transformed from an “expert panel” to a representative one. “Somehow you have to have more appropriate representation for the people that are taking care of patients; otherwise, we're going to keep going in the direction that we are now: procedural and not patient-oriented care. We need to reconstitute the membership, with some kind of weighting for the different societies,” he says.

Dr. Smith is under no illusions that such change will come from inside the RUC. “It will have to come externally, from someone who wants to get accurate information. From the CMS? Possibly. The government could come in and say, ‘This is what we've got to have.’”

Dr. Sigsbee is skeptical of even that solution. “Would adding more members from E&M services help? Somewhat, but it still would not tip the balance,” he said. “I think that, given the fact that they haven't been able to accurately set work values for the fee schedule over the last 20 years, that it's unlikely that the RUC could be successfully reformed. There has to be a group with a less vested interest in the outcome to make these decisions. It's hard to put down who that might be, but I think the RUC has been a failed experiment.”

He hastened to add that the implications found in some of the Wall Street Journal coverage — that the RUC has allowed physicians to raid the CMS to line their own pockets — isn't accurate. “They're deciding how to divide up the pie, but somebody else says how big the pie is,” he said. “For the CMS, the RUC was an act of genius. Physicians make these decisions and fight amongst themselves, and they accept the recommendations. It keeps them out of the political firestorm.”

But no matter how they're allotting the fees, the fact is that physicians of all specialties aren't keeping up. “While hospitals have seen a 3- to 5-percent increase in their allotments annually since 2001, physician reimbursements have hardly changed at all, and nowhere near what inflation would indicate they should change. That's a larger issue than the RUC itself,” Dr. Sigsbee said.

Indeed, in a Nov. 1 letter to the WSJ editor, AMA President Cecil B. Wilson, MD, wrote that “while the RUC doesn't set fees and has nothing to do with the size of the Medicare payment pie, the reality is that spending on physician services rose only 2.7 percent in 2008, and other areas of Medicare spending are rising faster than physician spending. In fact, inflation-adjusted physician payment fell 25 percent between 1996 and 2006.

“Without congressional action,” he concluded, “Medicare will cut all physician payments about 30 percent by Jan. 1. Congress needs to act on Medicare payment reform before Dec. 1.”

Returning to the RUC, Dr. Sigsbee noted that researchers in the early 1990s predicted exactly the situation neurologists and other “E&M specialties” are facing today. “Within two years after implementation of the fee schedule, they predicted that there would be a huge increase in lucrative outpatient diagnostic studies, which there has been,” he said. ”

When that fee schedule was set, the assumption was that the maximum differential of income, from a general internist to a highly paid surgeon, would be no more than 67 percent. Right now, the differential is 300-400 percent or more. There has to be a modification of the whole fee schedule so that the gross disparity between the financial recognition of procedures as opposed to face to face patient services is substantially narrowed.”

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  • Anesthesiology
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  • Dermatology
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  • Thoracic Surgery
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Mathews AW, McGinty T. Physician panel prescribes the fees paid by Medicare. Wall Street Journal; Oct. 26, 2010;
    Mathews AW, Dividing the Medicare pie pits doctor against doctor. Wall Street Journal. Oct. 27, 2010;
      ©2010 American Academy of Neurology