History of Resource-based relative value scale and how it works:
In the year 1992, Medicare significantly changed the way it pays for physician services. Instead of basing physician payments on charges, the Federal government established a standardised physician payment schedule based on RBRVS.
Learn more about on RBRVS http://localhost/main-site-update/free-practice-analysis/ and call us today for any assistance.
In this system, payments are determined by the resource costs needed to provide them, with each service divided into three components:
Physician Work
Practice Expense
Professional Liability Insurance
1. Physician Work:
The physician work RVU accounts for about 50% of the total RBRVS and is defined as the physician time and intensity involved in providing a service. The factors used to determine physician work include the time it takes to perform the service, the technical skill and physical effort, the required mental effort and judgment and stress due to the potential risk to the patient. Typically, the most intensive component of physician work is intraservice time or face-to-face patient time. After the patient encounter, postservice work may include communicating with the patient and family or coordinating further care.
2. Practice Expense:
It capture the non physician costs of providing services and vary according to whether the service is provided in a facility (eg, hospital) or non facility (eg, physician’s office). The practice expense component accounts for an average of 41% of the total relative value for each service. RBRVS are a composite of both direct and indirect practice expenses; each is calculated very differently.
Professional Liability Insurance:
In 2000, the CMS implemented the PLI relative value units. The PLI component of the RBRVS accounts for an average of 5% of the total relative value for each service. CMS calculates professional liability insurance RBRVS based on the mean of state malpractice insurance premium data across specialties. The RBRVS does not include adjustments for outcomes, quality of service, severity, or demand.
“The RBRVS is a complex and evolving system, especially given ongoing changes in CMS policies, new legislation, and changes in RBRVS procedures. However, understanding the rationale for the RBRVS and its broad features may help physicians to understand reimbursement changes or why various services are reimbursed differently. Furthermore, understanding the RBRVS gives physicians insight into a wide range of current and developing reimbursement models across all organizational settings, including blended and bundled payments, Accountable Care Organisations, and productivity payments for salaried physicians, because all base payments on the RBRVS.”
]]>