House Bill Would Help Correct Distortions in Medicare Physician Fee Schedule

July 18, 2013 10:45 am News Staff

The AAFP is supporting a bill called the Accuracy in Medicare Physician Payment Act(, H.R. 2545, introduced in the House by Rep. Jim McDermott, M.D., D-Wash. The bill is designed to supplement the work of the AMA/Specialty Society Relative Value Scale Update Committee (RUC) by establishing an expert panel within Medicare to oversee the valuation of physician services and to help correct distortions in the physician fee schedule.

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In a letter(1 page PDF) to McDermott, AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane, Wash., described the bill as "long overdue" and said that it "could make a major difference in how the Medicare payment system supports primary care physicians in offering better quality health care more efficiently."

Stream also said, however, that the legislation's expert valuation panel should include at least one primary care physician to provide a "perspective that has been most underrepresented in previous deliberations of the relative value of physician services."

The RUC is composed of 31 physicians and other health care professionals who act as an expert panel in making recommendations to CMS on the relative values of CPT codes. CMS often follows the recommendations of the RUC, giving the panel extensive influence in determining the values of CPT codes. Many family physicians and the AAFP have expressed a concern that the actions of the RUC are biased toward subspecialist procedures rather than evaluation and management (E/M) services, leading to an undervaluation of primary care services.

In a press release(, McDermott, who is the ranking member of the House Ways and Means Subcommittee on Health, said the RUC "is unevenly weighted by procedural specialists over primary care doctors."

McDermott's legislation would create an advisory panel of experts from a variety of fields, such as medical economics and technology, and would include payer and patient representatives. In addressing the valuation of physician services, the panel would review recommendations from external sources such as the RUC, putting the panel in a position to "supplement and not supplant the RUC," Stream said.

McDermott, meanwhile, also said his bill was about reining in a conflict of interest.

"No other area of the Medicare program asks providers to play such an active role in setting their own payments," McDermott said. "Medicare certainly needs clinical expertise in order to fairly set reimbursements, but an outside organization whose members benefit from $70 billion in annual public spending, needs checks and balances. No matter how well-intentioned, structural biases are inevitable, and we're seeing that effect as new doctors flock toward specialty care and away from primary care."

In the letter from the AAFP, Stream told McDermott, "We agree with your observation that CMS needs to have the expertise required to evaluate physician services and that this evaluation should be as objective and free as possible from the appearance of conflicts of interest. Your legislative proposal would go a long way toward providing CMS with the independent expertise that it needs, and it is consistent with prior recommendations of the Medicare Payment Advisory Commission and recommendations we made to the RUC last year."

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