The Resource Based Relative Value Scale (RBRVS) is a system used to figure out how much a physician’s work or labor is worth, and how much a physician is paid.
RBRVS was established in 1992 by the federal government to standardize payments made to providers participating in Medicare. It is also used by HMOs throughout the United States. RBRVS was based on work done by a team of Harvard University statisticians, physicians, economists and measurement specialists, commissioned by the federal government.
Within RBRVS, a relative value unit (RUV) is assigned to each of the three components that factor into the price paid for a service provided by a physician: physician work, practice expense, and malpractice expense. The payment is determined by multiplying the total value of those three factors by a “conversion factor,” a dollar amount that is determined by the Centers for Medicare & Medicaid Services (CMS). The amount is adjusted after applying a geographic adjustment factor (GAF) which takes into account the varying costs of providing care based on resources available at a location.
The three components:
• Physician work: This value accounts for the time, the skill and physical effort needed to provide a given service.
• Practice expense: This value accounts for the direct expenses related to a physician’s supplies and non-physician labor used to provide the service.
• Malpractice expense or professional liability insurance: This value contributes toward protecting a physician from certain legal and financial risks.
The RVUs are updated annually based on recommendations by the American Medical Association and its Specialty Society RVS Update Committee (RUC). The CMS uses the recommendations to determine the values of Current Procedural Terminology (CPT) codes, which document information about treatment and other medical services.
For example, the RUC may recommend that a CPT code 99213 (an outpatient visit) gets an RVU for physician work of 0.92 unit value, a practice expense RVU of 0.72, and a malpractice RVU of 0.03. And based on 2008 figures, the conversion factor is $38.08.
To figure out payment, all RVUs are added together and then multiplied by the conversion factor: (0.92 + 0.72 + 0.03) x $38.08 = $63.59 (the amount Medicare pays).
For a left heart catheterization (code 93510), which has an RVU total of 40.54, the amount Medicare pays is $1,543.76.
Critics of the RBRVS say the system influences how physicians select specialties and may cause shortages of certain types of physicians, such as primary physicians. Procedures such as stents, skin biopsies, CT scans require more effort, skill and time than seeing patients face-to-face and based on the RBRVS system, they have higher RUV values.
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