RUC bears a closer look

Although industry groups like America’s Health Insurance Plans have long argued that the absolute driver of premium rates is provider fees, the fact has received renewed attention in recent months. Perhaps it’s the growing body of evidence that can’t be ignored or the novelty of blaming insurers wearing off, but the issue finally seems to have come to the forefront.

Suzanne Delbanco, executive director of Catalyst for Payment Reform (CPR), says observers are catching on to the effects of provider consolidation in terms of price leverage. It’s all too easy to point to the aging population, insurance administration or costly technologies as reasons for high costs.

“In fact, right now it’s pricing,” says Delbanco. “That on the one hand is depressing, and on the other hand gives me cause for optimism because that’s something that can be negotiated.”

She also notes that the Relative Value Scale Update Committee (RUC), a 29-member physician panel that advises government health officials on reimbursement, bears a closer look. Medicare historically has accepted the RUC’s recommended pay scale for physician services without question.

However, Delbanco says, Medicare is scrutinizing the RUC recommendations more than it used to and pushing back.

“People are finally realizing that it’s not something that we can just ignore, and let it continue to operate behind closed doors,” she says.

Of particular concern is the dominant presence of specialists on the RUC and the way its secret-ballot rate determinations seem to skew in specialists’ favor. Delbanco believes increased price transparency and a critical review of the RUC will go a long way toward dampening price variation in healthcare.

She also participates in the National Commission on Physician Payment Reform, which last month released a set of recommendations including an overhaul of the RUC. Specifically, the commission calls for more diversity on the physician panel and transparent, evidence-based processes to validate RUC decisions.