Bill Introduced to Reduce Influence of Specialists on Medicare Physician Rates

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Concerned that having the American Medical Association (AMA) select the 31 physicians who sit on the influential Relative Value Scale Update Committee (RUC) that examines Medicare physician fee schedules creates a conflict of interest and encourages higher specialist fees, Representative Jim McDermott (D-Wash.) has introduced a bill to create an independent panel of experts to review physician reimbursement.

Rep. McDermott is a ranking Member of the Ways and Means Subcommittee on Health, which adds weight to his bill. While stand-alone single-issue bills that touch on controversial topics like physician fees typically die in committee, the idea proposed in the bill could be incorporated into a larger bill dealing with physician reimbursement, such as a bill to either remove or create a temporary fix for the sustainable growth rate formula that would slash Medicare physician reimbursement by a third if allowed to go into effect on January 1.

Rep. McDermott’s argument for the bill ( H.R. 2545) is that it would “fix” a situation where physicians are put in charge of evaluating the fairness of their own payments. In addition, the bill would introduce needed transparency into the process of reviewing physician fee schedules.

“No other area of the Medicare program asks providers to play such an active role in setting their own payments,” said McDermott in a press release posted on his website. “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.”

The bill is based on a recommendation from the nonpartisan Medicare Payment Advisory Committee, which advised establishing 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 that the RUC issue recommendations on needed changes in the physician fee schedule. It would also not change how these physicians are selected, which currently is by nomination from the American Medical Association (AMA).

However the independent experts would be the ones asking for the RUC’s recommendations and would be the ones reviewing it for potential bias, such as weighing fees for specialists over those for primary care doctors.


This story was updated on July 2, 2013, with the bill number and link to the bill tracking page.