“a fox in the hen house?”

Health care is rampant in the news these days. One article that got my interest in the Wall Street Journal on 10/27 was “Physician Panel Prescribes The Fees Paid by Medicare.” As my husband and I near retirement age, Medicare looms large on the horizon. I’ve already gotten an earful from friends, who gave me one more reason to take care of my health now.

The article, written by Anna Wilde Mathews and Tom McGinty, gives insight into the significant role played by physicians, in determining how much doctors are paid by Medicare.

Three times a year, 29 doctors gather around a table in a hotel meeting room. Their job is an unusual one: divvying up billions of Medicare dollars. The group, convened by the American Medical Association, has no official government standing. Members are mostly selected by medical-specialty trade groups. Anyone who attends its meetings must sign a confidentiality agreement.

Yet the influence of the secretive panel, known as the Relative Value Scale Update Committee, is enormous. The Centers for Medicare and Medicaid Services, which oversee Medicare, typically follow at least 90% of its recommendations in figuring out how much to pay doctors for their work. Medicare spends over $60 billion a year on doctors and other practitioners. Many private insurers and Medicaid programs also use the federal system in creating their own fee schedules.

The problem, it seems, other than the obvious one mentioned by Tom Scully, a former administrator of the Medicare and Medicaid agency that “it’s not healthy to have the interested party essentially driving the decision-making process,” is that the committee is “contributing to a system that spends too much money on sophisticated procedures, while shorting the type of nuts-and-bolts primary care that could keep patients healthier from the start–and save money.” Dr. Barbara Levy, Seattle gynecologist and RUC chairwoman has indicated that the committee is aggressively moving “to correct evaluations that lead to higher-than-appropriate payments for some services.” Next month Medicare will render doctors fees for 2011, which should include the committee’s recommendations.

Another inherent dilemma in the assignation of monetary values to medical procedures, is that doctors will be motivated to perform those that pay more. An inevitable by-product is spending growth, since there’s “all the associated costs for hospitals, lab tests and drugs.” Also of great concern are Journal findings that “services were paid too generously in some cases because the fees were based on out-of-date assumptions about how the work is done…more than 550 doctor services that, despite being mostly performed outpatient or in doctors’ offices in 2008, still automatically include significant payments for hospital visits after the day of the procedure, which would typically be part of an inpatient stay.” As an example, is an operation to treat male urinary incontinence which, according to Medicare’s 2008 statistics, were performed as outpatient services or in doctors offices 80% of the time. But because the procedure was last evaluated by RUC in 2003, the service still “wraps in payment for 118 minutes of hospital visit time after the day of surgery.” However, the Journal goes on to say that it’s unclear if the committee will suggest doctors now be paid less for the procedure anyway.

Granted, there’s great debate among physicians as to the value of medical procedures based upon personal experiences. It’s also fair to say that nobody wants to surrender what they’ve already come to expect in financial recompense. Nonetheless, having RUC rely “heavily upon surveys performed by doctor specialty groups, requiring as few as 30 responses,” with the instruction that it “is important to you and other physicians because these values determine the rate at which Medicare and other payers reimburse for procedures,” is an enticement to score high. “William Hsiao, the Harvard professor who led the original physician-work research used to set Medicare fees, argues the approach is almost guaranteed to inflate the values used to calculate fees. ‘You do not turn this over to the people who have a strong interest in the outcome.’ he says. ‘Every society only wants its specialty’s value to go up….You cannot avoid the potential conflict.’”

Medicare requires that out-of-sync payments be reviewed every 5 years. MedPac, a congressional watchdog, reveals that “ in the three previous reviews, the RUC endorsed boosts for 1,050 services, and decreases for just 167.”

Reimbursements for placing cardiac stents in a single blood vessel are based upon a 1994 RUC analysis. In 2008, doctors were paid $205 million for 326,000 such procedures.  Cardiologists suggest that stenting today, as compared to the mid-1990s, “is more routine and may often be less stressful.” According to David L. Brown, cardiologist at SUNY-Stony Brook School of Medicine, ‘The example used to set the code’s value is ‘way out of date,’…’In those days, stents were used when you were having a catastrophic event or thought you might have a catastrophic event.’ Stents and the catheters used to thread them into arteries are now smaller and easier to use, he says. The time varies by patient, but Dr. Brown says he required around 45 minutes on average to perform a single-vessel stenting. The RUC’s valuation suggests a two-hour procedure.”

On the other hand RUC member, representing The American College of Cardiology, and director of cardiology at Geisinger Medical Center, James Blankenship feels the stenting procedure is “ ‘fairly valued’. ” While he agrees that 2 hours may be too long, he “argues that the procedure may be harder because cardiologists now take on challenging patients who might once have gotten bypass surgeries.”

While we may not be inclined to question cardiologists’ fees since they have the power of life and death over us, how about payments for carpal tunnel surgeries. “A study published this June in the journal Medical Care Research and Review found the procedure times used by the RUC to calculate values may sometimes be exaggerated.” While Medicare’s payment of $44 million paid in 2008 was based upon a procedure time of 25 minutes for carpal tunnel surgery, Sullivan Healthcare Consulting Inc, which keeps the hospital database, showed the average time for teaching hospitals, based upon 2,602 surgeries was 17 minutes, and for community hospitals, based upon 4,093 surgeries was 18 minutes. Meanwhile, RUC’s figure of 25 minutes came from “39 surveys of surgeons, out of 150 sent out by groups representing hand surgeons, orthopedic surgeons and plastic surgeons.” Upholding Medicare’s payment, former medical director for the American Academy of Orthopedic Surgeons, Robert H. Haralson III, says the “payment isn’t too high, because the surgery is a more intense procedure than the current value implies.” And RUC leaders wrote to the medical journal insisting that the article was “outdated” and that different standards were used to classify the procedures than that used by the committee. I guess they were suggesting that it was like comparing “apples to oranges.” Hmmm.

It seems we must leave matters in the capable hands of RUC’s head Dr. Levy who assures us that the committee “has reduced values for nearly 400 services in the past and it is now reviewing hundreds more.” And in answer to primary-care groups who are pushing for more representation, we should accept her retort that “ ‘The outcomes are independent of who’s sitting at the table from one specialty or another.’” We should also feel reassured by Jonathan Blum, deputy administrator for the Centers for Medicare and Medicaid Services, who “says that for now, ‘we are comfortable’ with the RUC process. The federal health-care overhaul requires the government to insure that the doctor-fee values adopted by Medicare are accurate. ‘We’re not going to rubber-stamp recommendations,’ he says.”

I feel so much better now.

Yeah right!…hugmamma.