Today, Congressman Jim McDermott (D-WA), Ranking Member of the Ways and Means Subcommittee on Health, introduced a bill to address the lack of transparency and fairness in the Medicare physician reimbursement payment formula. Specifically, the bill would reform Medicare's reliance on the Relative Value Scale Update Committee, or "RUC," a panel of physicians who influence the Medicare fee schedule for doctor reimbursements.
Currently, the RUC, a committee of 31 physicians empaneled by the American Medical Association (AMA), conducts reviews in closed meetings and provides limited release of the minutes of its proceedings. It is unevenly weighted by procedural specialists over primary care doctors and relies heavily on anecdotal and self-serving survey evidence, rather than forensic data. This causes skewed fees for procedure-based services such as pathology, surgery and imaging, eroding pay to primary care physicians.
"No other area of the Medicare program asks providers to play such an active role in setting their own payments," said McDermott. "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."
Based on a recommendation from the nonpartisan Medicare Payment Advisory Committee, McDermott's bill would establish a panel of independent experts within the Medicare agency to identify distortions in the fee schedule and develop evidence to justify more accurate updates. The panel would be composed of members without any direct conflicts of interest and would include patient representatives. It would also be subject to the Federal Advisory Committee Act, which requires advisory bodies to hold open meetings and publish minutes.
Under the bill, Medicare could continue to request work from the RUC, but the independent experts would both initiate such requests and review RUC's work product.