Family Doctors Sue CMS, RUC Over Alleged Price Fixing
Posted Aug 16 2011 1:16pm
A 74-page law suit, filed this week in U.S. District Court in Maryland by six Georgia physicians, claims that the RUC (Relative Value Scale Update Committee) violates the Federal Advisory Committee Act’s requirements for representation, transparency, and methodological rigor. These plaintiffs claim, the RUC has systematically overvalued many specialty procedures while undervaluing primary care. They contend that the existing payment structure that RUC has dominated is a huge driver of healthcare costs. They argue that the health care system as a result has too many specialists doing too many unnecessary procedures and the price that we pay doctors has been fixed by this secret little committee of the AMA, which they feel is illegal. They also note that CMS (Centers for Medicare & Medicaid Services) has accepted more than 90% of recommendations made by the RUC. They further contend, that this fact and the resulting higher income for specialists has discouraged medical students from primary care and exacerbated the nation’s shortage of generalist physicians.
The current chair of the RUC, Barbara Levy, MD, acknowledged the lawsuit in an official statement but did not refer to any specific allegations. Instead, she focused on the fact that the RUC is an independent panel of physicians from all medical specialties, including primary care, who make recommendations to CMS as all citizens have a right to do. These volunteers provide physicians’ voice and expertise to Medicare decision-makers through their recommendations. Of course, in reality, there is really no other highly organized entity that functions in the manner of the RUC. The plaintiffs say they have tried to go through the traditional process of petitioning the AAFP (American Academy of Family Physicians) and the AMA (American Medical Association). They say that their complaints were ignored by the AMA, and the AAFP who sits on the RUC committee. The fact that the AAFP and other specialty groups sit on the committee makes using professional societies as advocates for change essentially impossible.
Another overlooked fact is that this group also passes judgement on new medical technologies and the payments that should accompany them. In lieu of CMS’s almost universal acceptance of RUC recommendations, this makes innovators of medical technology a prisoner to the RUC process, which includes obtaining a CPT code which is necessary for payment by any insurer including Medicare and Medicaid. Failure to obtain such a code, even if the new device or product is FDA approved, is essentially a death sentence from a market perspective for any new innovation as there will be essentially no revenue available to support its use.
While this system ostensibly protects the public to a degree, that is a false assumption. It falls to the FDA (Food and Drug Administration) to determine the safety and efficacy of drugs and devices. Certainly, there have been complaints about the performance of that duty by FDA. However, in no way is the RUC or AMA tasked with these duties. Nevertheless, they can act as a de facto regulator by failing to ‘recommend’ to CMS that a code be established for payment. Additionally, in line with the lawsuit allegations, even when the RUC and CPT committees do recommend a code for payment, they then recommend a rate of payment, thus setting a value on those services.
This is part and parcel of the contention by the plaintiffs in the lawsuit, that the RUC artificially undervalues certain procedural or office codes to the benefit of some and detriment of others. To be sure, valuing medical services is difficult under the system that currently exists. That said, it would appear that transparency and accountability are lacking in that the RUC, as an ‘arms length’ entity is not directly contracted to CMS, yet CMS, despite this, seems to use the RUC as their ‘rating agency’ when it comes to new procedures, codes and the values placed on those codes. Therefore, despite any formal relationship, the working relationship would appear to suggest that it is in fact contractual at least in the operational sense.
It will be very interesting to see how the courts rule in this case, since depending on the ruling, we could have a continuation of the status quo, or open up an entire process to review, revision and potentially replacement . . . obi jo