Debate Emerges Over Panel That Recommends Physicians’ Medicare Pay

A committee of physicians that divides billions of Medicare payments for doctors each year has incited debate about its control of taxpayer dollars, the Wall Street Journal reports (Mathews/McGinty, Wall Street Journal, 10/26).

The panel -- known as the Specialty Society Relative Value Scale Update Committee, or RUC -- is convened by the American Medical Association and since 1991 has submitted more than 7,000 recommendations to CMS on appropriate payments for physician work. According to AMA data, CMS has accepted more than 94% of the recommendations (Eaton, Kaiser Health News, 10/27).

Critics of the committee argue that it contributes to a health system that increasingly spends more money on sophisticated procedures, while redirecting money away from primary care that could keep patients healthier and ultimately reduce costs.

Tom Scully, a former CMS administrator, said that a conflict of interest results from physicians' recommending the amount doctors get paid by Medicare. He added, "It's indefensible. It's not healthy to have the interested party essentially driving the decision-making process."

Data indicate that some payments for services have been too high, sometimes resulting from inaccurate assumptions about how care was provided, according to the Journal.

The data show more than 550 physician services in 2008 automatically included significant payments for hospital visits after the day of the procedure, even though the follow-up services mostly were performed out of the hospital or in doctors' offices.

RUC Chair Barbara Levy said the committee currently is trying to correct evaluations that lead to payments that are higher than necessary. She said, "We've made tremendous changes in the last few years," adding, "The RUC is not a perfect process, it's just the best that's out there" (Wall Street Journal, 10/26).