Healthcare Business News

RUC physician fee lawsuit dismissed

By Andis Robeznieks
Posted: May 11, 2012 - 11:00 am ET

A U.S. district judge in Baltimore has dismissed a lawsuit filed by six primary-care doctors who were seeking to end the CMS' use of the American Medical Association Specialty Society Relative Value Scale Update Committee—commonly referred to as “the RUC”—to determine its annual Physician Fee Schedule.

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Judge William Nickerson ruled May 9 to grant the government's motion to dismiss the lawsuit, which named former CMS Administrator Dr. Donald Berwick and HHS Secretary Kathleen Sebelius as defendants. He noted in his opinion that Congress has not only banned judicial review of the financial value and amounts that the CMS determines a physician's work is worth, “but also the method by which those values and units are generated.”

Nickerson also cited cases upholding the constitutionality of the prohibition on judicial review that said that, since physicians know ahead of time how much they will be paid for their services before deciding to participate in the Medicare program, their due process rights are not violated. “Once they choose to become a participating physician or choose to treat Medicare patients, they have no legitimate expectation to be compensated at any rate other than that set forth in the PFS,” Nickerson wrote.

The suit was led by Dr. Paul Fischer and five of his partners at the 30-physician practice he founded, the Center for Primary Care in Augusta, Ga., who alleged that the RUC was an “unchartered and unofficial” committee and the CMS' reliance on such a panel violated the Patient Protection and Affordable Care Act. Nickerson acknowledged in his opinion that Fischer and his colleagues were not seeking monetary damages but an order against its use by the CMS.

“Because certain medical specialties are disproportionately represented on RUC, plaintiffs maintain that primary-care providers, like themselves, are undercompensated under the PFS,” Nickerson wrote. “Beyond the harm to their own practices, plaintiffs maintain that the over-reliance on RUC in formulating the PFS has lead to the overuse of unnecessary procedures by RUC-favored specialists and a ‘devastating effect upon the nations' health and healthcare spending.'”

In a Health Affairs report released this week, researchers analyzed CMS decisions on updating physician work values between 1994 and 2010, and they found that the CMS accepted 2,419 out of 2,768 RUC recommendations, or 87.4% agreement.

While the lawsuit was brought by primary-care doctors, the previous cases cited by Nickerson as precedents were brought by specialists such as anesthesiologists, cardiologists and eye surgeons.

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