Robert M. Centor, MD; Larry Culpepper, MD, MPH; Robert W. Morrow, MD; Roy M. Poses, MD


March 05, 2013

In This Article

Commentary From Roy M. Poses, MD (Internist)

Editor's Note:
We introduce this discussion with an abridged version of Dr. Poses' blog post on this topic: US Senate Subcommittee Asks What the RUC Is About, which covers the subject in great depth. Please see Dr. Poses' original blog post for links in support of specific assertions made below.

It has been a long time coming, but the issue of how the US Medicare and Medicaid system sets the fees it pays doctors, and hence sets the incentives on doctors that drive their healthcare decisions, finally got some public attention again.

Since 1991, Medicare has set physicians' payments using the resource-based relative value scale (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort they expend, and the resources they consume on particular patient care activities. Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care vs procedures, over time it has had the opposite effect, as explained by Bodenheimer and colleagues[1] in a 2007 article in Annals of Internal Medicine. A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, and understanding patients' values and preferences when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients.

To update the system, the CMS relies almost exclusively on the advice of the RUC. The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments.

However, the identities of RUC members were opaque for a long time, and the proceedings of the group are secret. As Goodson[2] noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review."

In fact, the fog surrounding the operations of the RUC seems to have affected many who write about it. We have posted about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until 2010, after the US recent attempt at healthcare reform, the RUC seemed to remain the great unmentionable. Even the leading US medical journal seemed reluctant to even print its name.

That changed in October 2010. A combined effort by the Wall Street Journal (WSJ), the Center for Public Integrity, and Kaiser Health News yielded 2 major articles about the RUC, in the WSJ[3] and from the Center for Public Integrity.[4] The articles covered the main points about the RUC, including its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), and how it appears to favor procedures over cognitive physician services.

In 2011, after the "Replace the RUC" movement generated some more interest about this secretive group and its complicated but obscure role in the healthcare system, the current RUC membership was finally revealed. It was relatively easy for me to determine that many of the members had conflicts of interest (beyond their specialty or subspecialty identity and their role in medical societies that might have institutional conflicts of interest, and leaders with conflicts of interest).

Then that year, a lawsuit was filed by a number of primary care physicians who contended that the RUC was functioning illegally as a de facto US government advisory panel. It appeared that things might change. However, it was not to be. A judge dismissed the lawsuit in 2012, based on his contention that the law that set up the RBRVS system prevented any challenges through the legal system to the mechanism used to set payment rates. The ruling did not address the legality of the relationship between the RUC and the federal government. And then everything was quiet again, until...

Meanwhile, after the attempt at healthcare reform made by the Affordable Care Act (aka "Obamacare"), which aimed to increase insurance coverage, there has been growing concern that there will not be enough primary care physicians available to manage the larger insured patient population. So, as reported by the Washington Times, a US Senate committee published a report on this issue[5]:

"The United States needs 16,000 more primary care physicians to meet its current health care needs, a problem that will only get worse if nothing is done to accommodate millions of newly-insured residents under President Obama's health care law in the coming decade, according to a Senate report released Tuesday."

Mirabile dictu, the report cited the influence of the RUC as part of the problem.

I salute Senator Sanders and his subcommittee for addressing the obscure and often quite anechoic topic, getting it some public attention, and at least raising the possibility of a legislative solution.

However, this is just a baby step. The hearing and report generated minimal media coverage. Given that Senator Sanders is widely regarded as well to the left of most of his legislative colleagues, the likelihood that any measure he would craft on this would be passed is minimal.

Meanwhile, questions we have raised again and again, most recently in 2011, remain unanswered:

  • How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the United States, yet this has caused no outcry.

  • Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?

  • How did the RUC become de facto in charge of this process?

  • Why does the AMA keep the membership of the RUC so opaque, and give no input into the RUC process to its general membership?

  • Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?

  • Why has there been so little discussion of the RUC and its responsibility for an extremely expensive healthcare system dominated by high-technology, expensive, risky, and invasive procedures?

Economists have beaten us over the head with idea that incentives matter. The RUC seems to embody a corporatist approach to fixing prices for medical services to create perverse incentives for physicians to do more procedures, and do less conversing with and examining patients, examining the best clinical research evidence about their problems, and rigorously thinking about how best to help them. More procedures at higher prices helps physicians who do procedures. It may help even more the corporations that provide the devices and drugs whose use is necessitated by such procedures, and the hospitals who can charge a lot of money as sites for performance of procedures. It may even help insurance companies by driving ever more money through the healthcare system, and thus allow rationalization for higher administrative expenses as a function of overall money flow.

Yet, incentives favoring procedures over all else may lead to worse outcomes for patients, and more costs to patients and society. If we do not figure out how to make incentives given to physicians more rational and fair, expect healthcare costs to continue to rise, while access and quality continue to suffer.