HCI3 Update from the Field: Pull the Rug from Under the RUC

Submitted by francois.debrantes@hci3.org on Friday, July 20, 2012 - 12:00

Newtown, CT – July 20, 2012

What will it take to have the rug pulled out from under the RUC? With CMMI moving evermore aggressively to institute value-based purchasing contracts with willing health systems, practices and hospitals, the arcane, opaque, and self-serving process in which fee schedules are proposed and adopted by CMS via the RUC needs to go. For those who aren't familiar with the process, the RUC committee, staffed by members of specialty societies, sits around in closed meetings and decides which fees for what services should increase and by how much. These recommendations find their way to CMS (which usually adopts 90% of them) and are then published in the Federal Register with a note on how CMS intends to apply them. At that point, the public can comment and make alternative recommendations. Of course, few, if any alternatives, are ever counter-recommended. This process, which according to the then-CMS Administrators, was well-intentioned when started a couple of decades ago, has now led to massive distortions, and most of these past CMS Administrators have recently called for this nonsense to stop. Two years ago, Bob Berenson wrote a good summary of these distortions, but, unfortunately, nothing has changed, despite an increasing level of scrutiny on the entire RUC/CMS process.

What this means to you – private and public sector payers (and all of us as health plan members and taxpayers) are paying a price for this soviet-style method of establishing physician fee schedules. And that's what it is. Price-fixing by insiders to serve its interests without any market mechanisms to counter it. It's nutty and simply shouldn't be tolerated. Why in the world wouldn't CMS convene an objective third party to take on this task? Yes, it would require some funding (the RUC is "free" labor), but how much have the actions of the RUC cost us as a nation? Most policy experts agree that the RUC's favoritism of specialty and procedural fees have come at the expense of fees for cognitive services and significantly harmed PCPs. In addition, some of the estimates of time for specific tasks have been proven vastly overestimated, leading to significantly higher costs for procedures than should reasonably be established. Research suggests that the RUC estimate of 30 minutes to read an echo takes, in fact, less than 5. As such, clinicians or organizations billing for this task are sending 12 claims an hour instead of 2….that's a tad of a difference. The inappropriate adoption of the RUC's recommendations by CMS has already cost us far too much. It's up to the government to put a stop to this, and it's up to all of us to demand that it stops. Moving away from FFS payments is one way, but calling Congressional Representatives is another. We should all do both now.


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org