AAFP Backs Legislation to Make Medicare Payment Process More Transparent, Accurate

The AAFP has thrown its support behind a House bill that is attempting to bring more accuracy and transparency to the process used to assign relative values to Medicare services.

Currently, the AMA/Specialty Society Relative Value Scale Update Committee, or RUC, provides the only guidance on values for Medicare services, but the Medicare Physician Payment Transparency and Assessment Act, H.R. 1256, would require CMS to use alternative means of verifying values for medical services, as well.

"The mechanism for how (Medicare payment) codes are evaluated has contributed to the devaluation of family medicine and primary care through the years," said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas. He added that it doesn't seem likely the current RUC process will change this imbalance.

However, H.R. 1256, which was introduced by Rep. Jim McDermott, D-Wash., would require CMS to hire independent contractors to identify and analyze misvalued codes for medical services provided to Medicare beneficiaries and to conduct an annual review of these codes. This independent analysis would augment the work of the RUC and could result in greater accuracy and transparency, according to a March 30 press release from McDermott's office.

The AMA created the RUC in 1991 to act as an expert panel in making recommendations to CMS on the relative values of CPT codes using the Resource-based Relative Value Scale, or RBRVS, mandated by Congress in 1989. According to McDermott, the RUC's recommendations are accepted by CMS and implemented more than 90 percent of the time.

The AAFP is not calling for the elimination of the RUC, said Goertz, but it has endorsed the McDermott bill as an alternative to the current process. He noted that the AAFP has for years asked the AMA to provide more primary care physician representation on the RUC and to provide greater transparency in terms of how the RUC's votes are taken. "But there does not appear to be movement in that direction," he said.

Currently, primary care physicians comprise only one-sixth to one-thirteenth of the RUC's 29 members, even though they provide about half of Medicare physician visits.

"Most people don't know this, but there is this small panel that decides behind closed doors what the reimbursement rates will be for certain medical procedures," McDermott said in the news release. "For two decades now, this panel has been dominated by (sub)specialists who undervalue the essential and complex work of primary care providers and cognitive specialists, while often favoring unnecessarily complex, costly and excessive specialty medical services. The result of this is clear -- there is a shortage of family doctors, patients don't necessarily get the services they need and medical costs are increasingly driven higher."

McDermott also pointed out that "since the creation of the RUC in 1991, the income disparity between primary care versus procedure-heavy (sub)specialists has grown from 61 to 89 percent."

"Study after study has shown that primary medical care must be the foundation for a high quality, efficient health care system," said Goertz. "If we are to build up our primary care physician workforce to create this foundation, we need a system that recognizes and appropriately rewards the medical expertise and cognitive skills of primary care physicians. This legislation is an important step in that direction."

According to McDermott's bill, the AMA's sponsorship of the RUC has been a good faith effort to help CMS develop the physician fee schedule, but now a more robust process is needed.

The Medicare Payment Advisory Commission has found that although the RUC tends to identify and correct undervalued codes, it does not have the same incentives to find and correct overvalued codes. "(Sub)specialists, especially those who derive the majority of their income through procedural codes, have no incentive to reduce the value of potentially overvalued codes, even though the requirements for physician work in many procedures should be generally reduced as time passes and proficiency increases," according to the text of the bill.

The legislation also stresses that the assignment of relative values to evaluation and management, or E/M, codes was the most unsubstantiated component of the original RBRVS and has not been systematically and scientifically studied since the institutionalization of the RBRVS. In the meantime, the advent of electronic health records will require new methods to assess the intensity and work effort of E/M codes.