The Resource-Based Relative Value Scale and Physician Reimbursement Policy

Most physicians are unfamiliar with the details of the Resource-Based Relative Value Scale (RBRVS) and how changes in the RBRVS influence Medicare and private reimbursement rates. Physicians in a wide variety of settings may benefit from understanding the RBRVS, including physicians who are employees, because many organizations use relative value units as productivity measures. Despite the complexity of the RBRVS, its logic and ideal are simple: In theory, the resource usage (comprising physician work, practice expense, and liability insurance premium costs) for one service is relative to the resource usage of all others. Ensuring relativity when new services are introduced or existing services are changed is, therefore, critical. Since the inception of the RBRVS, the American Medical Association's Relative Value Scale Update Committee (RUC) has made recommendations to the Centers for Medicare & Medicaid Services on changes to relative value units. The RUC's core focus is to develop estimates of physician work, but work estimates also partly determine practice expense payments. Critics have attributed various health-care system problems, including declining and growing gaps between primary care and specialist incomes, to the RUC's role in the RBRVS update process. There are persistent concerns regarding the quality of data used in the process and the potential for services to be overvalued. The Affordable Care Act addresses some of these concerns by increasing payments to primary care physicians, requiring reevaluation of the data underlying work relative value units, and reviewing misvalued codes.