Primary Care Reimbursement: A Primer Heather Brislen – 30 March 2011

THE RUC-KUS

The RUC and Primary Care

How doctors get paid

History, managed care and RVUs

The RUC (and “Sustainable” growth rate)

Other factors (volume, private insurance)

The RUC and Primary Care

GOALS –

No Whining!

Realize that the way things are now is not how they have always been – change happens.

Source: http://www.graham-center.org/online/etc/medialib/graham/documents/publications/mongraphs-books/

2009/rgcmo-specialty-geographic.Par.0001.File.tmp/Specialty-geography-compressed.pdf

Big Themes:

1. Managed Care was a BIG DEAL, and it failed 2. Balanced Budget Act of 1997 (Clinton-era)

meant BIG changes for health care 3. Costs are always climbing, so someone is

always going broke. 4. What changed (or might) with the ACA

A Simplified History

1970s Costs are skyrocketing

Nixon’s plan for national health program is killed

the managed care act lays the new foundation for HC system

1980s Costs are better controlled

Medicine moves away from FFS to DRGs and capitation

With a follow-up backlash and managed care starts failing

1990s Costs keep going up, tempered some by dying managed care

Clinton’s plan for a national health program is killed

Instead, the SGR is passed in 1997 to attempt to control costs

2000s FFS returns

Meanwhile, back at the ranch…

Managed Care FAILS

A great model, good for patients

Also great, it turns out, for making $$ if you’re an HMO

In the resulting tug-of-war, patients and doctors revolt and kill the movement

Too much spending!

In the wake of managed care, the health care environment has reverted to fee-for-service

This is Expensive!

And Medicare, as usual, leads the way to changing the way that we pay for health care

1992 - The RBRVS

The Resource Based Relative Value Scale Part of CMS To determine reimbursements (for Medicare) for all of

the different things that we do – all FFS-based

What is the relative value of … A pap exam vs A knee replacement vs A colonoscopy vs …

RVUs – Relative Value Units

For each CPT code, the relative value is judged as a composite of:

Work involved (50%)

Expense (incl opportunity cost of specialty training) (40%)

Liability (10%)

Two general categories of codes:

Procedures

Evaluation and Management (aka Cognitive)

RBRVS and RVUs

RBRVS Rolled out in 1992

In 1997, the Sustainable Growth Rate is passed, limiting the amount by which Medicare physician expenditures can grow every year

This is the SGR – which gives us the

Medicare conversion factor

(converts RVUs to real money)

30 min office visit - CPT code 99214 (E/M code) Relative value unit (RVU): 2.18 Conversion factor: 37.9

Fee = 2.18 x 37.9 = $82.62

Colonoscopy - CPT code 45378 (about 30min) RVU: 5.46 Conversion factor: 37.9

Fee = 5.46 x 37.9 = $206.93

RVUs – Relative Value Units

Source: http://www.familymedicine.medschool.ucsf.edu/pdf/cepc/0406_pres/BodenhPPTslides.pdf

RBRVS – mission and process

RBRVS was intended to rationalize reimbursement systems, provide standardization and fairness. It’s “owned” and run by CMS

The expectation at the time of its roll-out was that primary care would see huge gains and that specialty care would lose some money.

(Ha.)

RBRVS – mission and process

Enter: the AMA

The AMA owns and maintains the CPT coding system

They sponsor the RBRVS Update Committee – or RUC – in order to advise CMS on its RVUs and better manage the CPT system

Critical Point: about “advising CMS on its RVUs,”

No one else does this!!

The RUC

30 members

23 appointed by national specialty societies:

Anesthesia

Cardiology

CT surg

Derm

Emergency

Family Med

GI

Gen Surg

ID

Medicine

Neurology

Neurosurg

OB/Gyn

Optho

Ortho

ENT

Pathology

Peds

Peds Surg

Plastic Surgery

Psych

Radiology

Urology

Even though PCPs provide about half of all

Medicare visits, primary care has only 3/29 (14%) of the seats on the RUC

Each spec. society has a seated member:

The specialty surveys its own membership about changes to RVU Values (at least 30 members)

Should “X” service to receive ahigher or lower RVU value?

The RUC

Source:http://www.familymedicine.medschool.ucsf.edu/pdf/cepc/0406_pres/BodenhPPTslides.pdf

The RUC

Membership is not representative of proportional health care costs, services, or workforce members

Meetings are proprietary and secret

All but 3 members have no term limits

AND, functionally, the RUC is the primary advisor to CMS for all work-RVU decisions.

The RUC

The RUC submits RVU update recommendations every 5 years to CMS

Greater than 90% of the recommendations are adopted

And, in general, the recommendations are always for increased reimbursement, but this is a closed system, remember?

Nuts and bolts:

Remember: RVU = Work/intensity involved (50%) + Expense

(40%)+Liability (10%)

RVU Office visit vs. RVU colonoscopy

time is the same.

Intensity is graded much higher for colonoscopy

In fact, the RUC has awarded even HIGHER intensity for a 15min procedure that used to take 30 min

Primary care physicians cannot do E/M visits in shorter time – they don’t have the option of increased volume that proceduralists do

Specialists can do procedures in shorter time

Technology improves

The more you do a procedure, the faster you become

The Snowball effect

Increases in volume of Medicare services 1999-2003

15% - Evaluation and management services

14% - Major surgery

26% - “Other procedures” (chemotherapy, endoscopy, minor surgery)

36% - Diagnostic tests

45% - Imaging

Source: Glenn Hackbarth, November 17, 2005. Medicare Payment Advisory Commission (MedPAC). www.medpac.gov

The RUC

Many more codes for procedures than for E/M

And, many more recommendations for increases to the procedural codes than to the E/M codes

Raises for procedures were/are larger and more frequent than for cognitive services net effect: payments for procedures >> cognitive

service

2000 RUC recommendations:

469 increases in RVUs

27 reductions

E/M codes were not discussed.

Procedure and imaging codes went up and office codes remained the same

The RUC

The POINT –

Primary care suffers at the hands of the RUC, and this is largely due to the structure of the committee.

No one else (of consequence) is making recommendations to CMS on the RBRVS, and, at the root of this all is an historical shift back to FFS from a managed care/capitation model of payment

Conversion factor – 2010

$36.08

While many insurers use the RBRVS for their relative

pricing, their own conversion factors differ from

Medicare’s

AND – often specialists have higher conversion factors

than do PCPs, even from the same payer

Proposals - ACP

Increase E/M RVUs

Pay for phone and e-mail encounters

Pay for care coordination for complex pts

Pay for performance infusion of $$

Revise SGR formula so primary care is not affected

Proposals - AAFP

Repeal SGR

Medicare payments should increase based on cost of providing care (eliminate RBRVS?)

Pay for performance

Eliminate payment for unnecessary, ineffective or redundant

Pay for care coordination in a captiated model on top of fee-for-service

Proposals - ACA

2010 – already done: CMS to examine and pilot-test new models for payment

and delivery i.e. PCMH, ACO, other “integrated systems”

2011- on deck: Medicare physician payment

providing a high volume of certain designated services (?) and general surgeons practicing in underserved areas 10% bonus for 5 years

New standards to be issued for ACOs A host of legal changes to boot to provide for broad

participation

MedPac Report 2008

“Patient access to high-quality primary care is essential for a well-functioning health care delivery system.”

1997: Too many doctors!

Important Historical Point – this general physician shortage is a relatively new idea

Old Assumption – HMOs were to provide well-regulated use of physician resources

All influential models focused on this variable

Six key national medical organizations based a joint policy proposal on this projected surplus. (1997)

Darrell G. Kirch, MD; David J. Vernon, BA Confronting the Complexity of the Physician Workforce Equation,

JAMA. 2008;299(22):2680-2682

1997: Too many doctors!

The result of “too many doctors” thinking: Medicare caps support for GME positions at the

number on Dec 31, 1996. The POINT – a cap on the workforce creates a closed

system in which we produce all of our new doctors At the same time, costs are capped (sort of) via the

SGR

NOW – we have TWO closed systems – Workforce – a fixed number of residents

Reimbursement – a quasi-fixed funding source

The fraction of US Medical Graduates matching into primary care peaked in 1998 at 53%

In 2006, just 39% of US medical school seniors matched in to Family, Peds, or Medicine

In 2011 – Family (10% up from 2010), but primary care total 38.5%

So, what happened to Primary Care?

In my view, 3 things are currently hurting our ability to produce and recruit PCPs

1. The flawed RUC system results in PCPs making roughly half, on average, what specialists make

2. We have limited the number of residents-in-training (we can do a whole talk on this later) and dis-incentivized training pcps.

3. The work is HARD. Patients in primary care now:

are older, have more chronic conditions, are more complex, have more diagnoses per visit, more meds per visit, more screening due, and require more counseling, education and therapeutic services per visit