• Doc fix or red herring?

    It’s been a while since I’ve seen news on the doc fix. And I didn’t remember it being time for the usual dance. So I was surprised to see this in the news:

    Two House committees are claiming momentum for their effort to repeal and replace Medicare’s flawed physician payment formula, the sustainable growth rate (SGR).

    The Energy and Commerce and Ways and Means Committees on Friday released a more detailed version of their long-term “doc fix” proposal and requested stakeholder feedback by July 9.

    “We remain committed to a deliberate and transparent process as we work to help our doctors, help our seniors and ensure we have a fair system with the best quality of care,” Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said in statement.

    The SGR is problematic because it requires intervention from Congress every year to stop a major pay cut to Medicare providers.

    Fixing this is a great idea. Of course, it will cost a lot of money. But I wonder if the slow health care spending growth of the last few years would make the projected cost of a fix look cheaper. If so, it might be a great time to try and get this done. That said, passing anything these days with a 12 digit price tag seems unlikely.


    UPDATE: Austin tells me that the CBO has confirmed the doc fix is now cheaper, and that this information has been in the news in the last few weeks. Mea cupla.

    • Kudos to Obama for including a doc fix in FY 14 proposal as well. Was about $200B in his budget, I believe. CBO has said similar, I think.

      But it seems there’s another problem. When we talk about the doc fix, it usually refers only to the SGR, which dictates the rate of growth. Fundamentally, the problem lies with the RBRVS (resource based relative value scale) which determines the base rate of payment. Don’t know if RBRVS fix is likely though. Seems that doc groups (specialists in particular) would defend the status quo.

      • What exactly do you mean by an RBRVS fix?

        • I’m far from an expert on precisely how the RBRVS works. But as I understand it, from reading others’ analysis, the RBRVS tends to value specialist services (the value of which may be questionable in some cases) at a much higher level than E&M (Evaluation & management) services, because it places greater value on specialist skills rather than primary care doc skills.

          RBRVS fix, as I see it, would develop a new formula that gives more weight to E&M services.

    • Also, let’s be honest. Fixing the SGR doesn’t really cost more money. The money is still spent after Congress passes the doc fix. Current law vs current policy, basically.

    • YF is right both times – the savings are on paper, the money is being spent anyway, so it’s not a real expense.

      This article


      says they are trying to fix the RUC and RBRVS. This would be extremely exciting. The RUC is a secretive price-fixing cabal administred by the AMA that assures that proceduralists are wildly overpaid and gives huge incentives to cut people. Seriously. I’d be shocked if this ends up in the bill, but it could have a large effect.

      • CMS has final authority as to whether they accept or deny the RUC’s recommendation. It’s true that CMS very often accepts the RUC’s recommendation though (there was a Health Affairs article on this a year or two ago).

        But if they didn’t utilize the RUC, how would Medicare go about setting prices for various services?

        • It’s true CMS has legal authority to disagree with the RUC, but they don’t have the expertise (ie, no one is hired to oversee RUC recommendations) or the political will to fight AMA to improve it, which is what this would accomplish.

          The article says “a new panel of independent experts would review all work produced by the RUC. The new panel would hold open meetings, publish minutes and include patient representatives”

          In fact, there are a bunch of relatively easy changes that could be made. Obviously RUC and the RBRVS are impediments to any clustered payment scheme (bundled, episodic, capitated, P4P, etc). They also have a very simple formula that pays more based on the physical “intensity” of an activity, harming primary care. Changing that would be flipping a number. They also do very little to assure that the resource evaluation that goes into the payment scale is accurate. This is how ophthalmologists were paid as though cataract surgeries took an hour when the average surgery was under 20 minutes, how chemo infusions were billed as procedures, etc. A program of recurrent structured evaluations of resource intensity would fix this fairly easily. Improving the activity of the RUC is really low-hanging fruit.

    • I’m not sure I agree that improving the activity of the RUC is really low hanging fruit. I think some of the obvious reforms aren’t so easy to implement.

      “a new panel of independent experts would review all work produced by the RUC. The new panel would hold open meetings, publish minutes and include patient representatives”

      That sounds great but there are plenty of problems with this approach as well:

      1. You could see a problem the FDA has, which is finding qualified experts to sit on a panel who aren’t conflicted

      2. What additional information or data would the new panel have access to that would allow them to “fact check” the RUC’s work? If the RUC surveys specialists and they report back some measure of intensity, how does the independent panel assess how accurate that measure is, apart from anecdotally?

      3. Patient representatives again sound great, but I don’t think their inclusion would meaningfully change the outcome of such a panel

      And as far as “a program of recurrent structured evaluations of resource intensity” — look I totally agree this would be better than simple surveys of specialty societies, but how feasible is this? What does such a program even look like?

      And I agree with you that primary care takes a back seat under resource-based systems, but that doesn’t mean we should scrap the entire system. Particularly as you think about valuing new procedures and technologies.

      • I see your points and agree with most of them, but these issues seem smaller than the problems of the current system. The biggest issue is that a committee that isn’t 80% specialists with no expertise in payment will likely have good ideas that I don’t have and they will fix the intensity adjustment. The intensity adjustment is changing a number and requires no work or evaluation, just values. As for evaluating the RBRVS, it’s easy to imagine a billing-based system, where if an eye doc bills for 40 cataract surgeries a day, they’re probably not taking an hour each, right? Or a survey of EHR records. How aggressive are the current surveys? Does anyone even know? The RUC doesn’t release their records.

        Similarly, FDA committees, where people are selected by accomplishment and some have conflicts aren’t ideal, but they’re a lot better than the RUC, where the entire reason for selection is because of a conflict – strong connections within their specialty society,

        In general, I’m not sure resource-based systems are so inherently biased against primary care. This one is.