Six Primary Care Physicians Sue CMS, Claim Doc Payment System Favors Specialists

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

A lawsuit brought by six Georgia-based primary care physicians Aug. 8 seeks to bar the Centers for Medicare & Medicaid Services from using recommendations from an American Medical Association panel when determining Medicare physician reimbursement rates (Fischer v. Berwick, D. Md., No. 1:11-cv-02191-WMN, complaint filed 8/8/11).

CMS has “illegally delegated” its valuation responsibility to the AMA Relative Value Scale Update Committee (RUC), the complaint, filed in the U.S. District Court for the District of Maryland, said.

CMS's “neglectful acceptance” of the RUC's recommendations has resulted in a physician payment system that overvalues specialists and undervalues primary care physicians, the complaint alleged. The physicians, members of the Center for Primary Care PC in Evans, Ga., alleged the RUC is dominated by specialists and is biased against primary care physicians.

This system “creates systemic incentives to provide unnecessary and unnecessarily complex services,” the physicians said in a statement.

CMS ‘Out of Compliance.'

CMS has often rubber-stamped the RUC's recommendations without further due diligence, the physicians said in a statement.

“More to the point, while CMS has relied primarily on the RUC to value medical services, functionally treating it as a federal advisory committee, it has not required the RUC to adhere to the management and reporting rules within the Federal Advisory Committee Act (FACA),” the statement said. “In this, the physicians believe that CMS has colluded with the RUC and is out of compliance with the law.”

Responding to the lawsuit, Barbara Levy, the doctor who chairs the RUC, said in a statement that the organization “is an independent panel of physicians from all medical specialties, including primary care, who make recommendations to CMS as all citizens have a right to do. These volunteers provide physicians' voice and expertise to Medicare decision-makers through their recommendations.”

Rep. McDermott Agrees on Specialist Bias

Rep. Jim McDermott (D-Wash.), a physician and a member of the House Ways and Means Committee, said in an Aug. 8 statement that he agrees with the plaintiffs that RUC is “heavily biased towards specialists.”

CMS follows the RUC's recommendations more than 90 percent of the time, McDermott said. “Moreover, since the creation of the RUC in 1991, the income disparity between primary care versus procedure-heavy specialists has grown from 61% to 89%,” the statement said. In March, McDermott introduced the Medicare Physician Payment Transparency and Assessment Act of 2011 (H.R. 1256) to require RUC oversight.

“The bill would use independent analytic contractors to conduct surveys and collect data for physician services paid under Medicare and to annually identify services that may be over or under-valued,” the statement said. The American Academy of Family Physicians and the Society of General Internal Medicine have endorsed the measure.

Remedies Outlined

The physicians agreed with McDermott that primary care physicians are undervalued in the physician payment system process.

The complaint asks to the court to:

• declare that CMS and the Department of Health and Human Services have violated the Administrative Procedure Act by unlawfully using the RUC as a de facto federal advisory opinion;

• order CMS to charter RUC as a federal advisory committee and open the AMA RUC procedure to the public; and

• enjoin CMS and HHS from implementing the physician fee schedule to the extent the defendants rely improperly on the RUC as a de facto federal advisory committee.

The complaint also asks for attorneys' fees and costs.

The physicians said in their statement that they funded the action themselves and that they are not asking the court for damages.

“Instead, [we] are using the legal system to try to effect systemic health care change in the public interest,” they said in the statement. The physicians are soliciting donations to help pay for the lawsuit's costs.

The complaint is at http://op.bna.com/hl.nsf/r?Open=droy-8kklwq . A copy of H.R. 1256 is at http://mcdermott.house.gov/images/pdf/mcdermottrucbill.pdf .