• The Fox Guarding the Medicare Reimbursement Hen House

A recent article in Politico, http://politi.co/1tT0w1c, by Katie Jennings highlighted an issue that I’ve been talking about for years.  It reminded me of a response I got from a Medicare official a number of years ago when I asked a question after he gave a speech to the American Geriatrics Society.  “You doctors control your own reimbursement from Medicare,” he said.  Unfortunately, “we doctors,” were not us geriatricians.  “We doctors,” were the AMA (American Medical Association), and the committee of the AMA that controlled physician reimbursement was called the RUC (Relative Value Scale Update Committee).

The RUC was formed after President George Bush signed the Omnibus Budget Reconciliation Act of 1989.  Since this time the income gap between specialists and primary care physicians (including geriatricians) has grown significantly.  The RUC essentially determines how physicians are paid to care for Medicare beneficiaries.  From the onset, the committee was made up almost exclusively of specialists. In fact, until very recently, there were no regular members of the committee that were geriatricians.  A committee whose purpose was to determine physician reimbursement for the care of Medicare beneficiaries had no members with expertise in geriatric medicine.  This recently changed with the addition of two permanent seats on the RUC for primary care, one of those seats belonging specifically to a geriatrician.  The fact that there is now one member out of twenty nine with expertise in geriatrics is better, but not very encouraging when viewed from a broad perspective.


The major problem with the RUC is that it is not representative of the physician population at large.  The average primary care physician, on the front lines caring for their patients, does not make up less than 5 percent of all physicians.  It is absolutely not surprising that over the past twenty years, Medicare reimbursement has increased substantially for those specialities that ultimately constitute the vast majority of RUC members.  The fox has truly been guarding the physician reimbursement hen house.  


Another interesting confounding factor is that the government pays the AMA royalties for the privilege of using their coding system. These royalties have been noted to exceed 70 million dollars a year. The AMA also brings in millions of dollars in revenue from publications that relate to the entire coding system.  It is unlikely that most of these revenues are used solely to maintain the coding system, and in fact, it has been recently noted that the RUC process costs about $7 million annually. The AMA also spends a significant amount of money lobbying congress, averaging lobbying expenditures of almost $20 million a year over the past several years.  As Medicare is a federally legislated program, and all changes to the program must be legislated by congress, lobbying has a important place in the process and must be recognized.  The AMA has a clear incentive to maintain the status quo as it relates to reimbursement, and they have the financial resources to back this up with one of the largest lobbying efforts in the country.


How can we fix this problem?  I have long advocated dissolving the RUC, but this would leave a vacuum when it comes to determining physician reimbursement.  How would that vacuum be filled?  Will the new approach be better than the old one?  For example, if the RUC were replaced with government bureaucrats, would that improve matters?  Should the process be depoliticized?  How could we achieve this goal?  


I have never understood how a committee that determines the reimbursement of health care providers who care for Medicare beneficiaries could be so lacking in geriatric medical expertise.  At the very least, a clear majority of RUC members should have expertise in Geriatric medicine.  Fortunately, there are physicians in the medical and surgical subspecialties who have demonstrated a clear focus in the geriatric aspects of their specialties.  More importantly, primary care must have a proportionally greater impact on the decisions made by the RUC.  This could be done by requiring RUC recommendations to go through a smaller executive committee that was equally represented by primary care physicians and specialists, all with expertise in caring for older adults.


What is the likelihood of major changes such as these happening?  Unfortunately, if one does the lobbying dollars math, change will not be readily forthcoming. Maybe this is why I find myself going back to the threat of dismantling the RUC completely.  Is that the only approach that will force the necessary changes in this process?

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