RBRVS

RBRVS – A Primer


Any discussion of physician compensation tosses around RBRVS – Resource-based relative value scale – as if it is understood as readily as the time of day.  Yet few understand where and how this payment device originated.

RBRVS and their parent RVUs – relative value units – became the standard tool for Medicare reimbursement fee schedules in 1992 and have subsequently been adopted by the vast majority of insurance payers as their model, in one form or another.

Before 1992, physician compensation was based on historical charges physicians billed for their services, under a concept known as UCR – usual, customary, and reasonable.  Payers applied various statistical measures, such as the median charge; to set a single payment level for each service rendered. In the current discussion of RBRVS reimbursement, it is often forgotten that UCR was far from a satisfactory means of fixing payment rates.  Each payer interpreted UCR differently, so payments for the same service differed greatly, with no apparent rationale.  Besides being a source of complaint about physicians, and for patients who were often reimbursed far less than physician charges, UCR was equally problematic for the business community.  With health costs rising, UCR was viewed as inflationary as it relied on physician’s self-reported fees.  Medicare reported the real dollars spent on physician services per enrollee increased by 62.3% from 1980-86, while the number of enrollees increased only 12%.  The increase was half attributed to increasing physician fees and a half to the volume of services provided. This pattern of increasing costs of Medicare has continued unabated over the years.

Politically this was an unsustainable situation when coupled with growing problems of access as the gap in primary care access and specialist reimbursement widened.

Responding as Washington usually does, a commission was appointed, and the Physician Payment Review Commission was established in 1986 at the Harvard School of Public Health in cooperation with the AMA.  Their purpose was to develop a compensation system that was based on what inputs were required for each service, to build rationality into a non-system of physician compensation.

Initially, the study evaluated 12 major specialties, expanding use, and the CPT manual to assign relative values to each service, some 7,000 codes.

The three components of physician cost were considered the input into the development of a numerical value, an RVU for each CPT.

  1. Work expended by physicians by CPT code, including time spent before and after patient visits and procedures;
  2. Practice costs incurred in rendering services; and
  3. Opportunity costs of training or income foregone by physicians to obtain additional training

The Harvard/AMA researchers of the Commission surveyed 3,200 physicians, focusing on the work expended component of input.  Experts selected by each specialty society then scrutinized the survey results.  Finally, the investigators went to 120 individuals representing interested constituents – consumers, physicians, payers, and researchers – to critique both the findings and the methods.

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Reviewers found a high degree of reliability and validity in the survey.  A considerable amount of time was spent evaluating the work component of cognitive services, such as office visits because physicians in disparate specialties use the common codes in reporting these services.  The results independently obtained from thousands of physicians in multiple specialties differed less than 10 percent.  The RVUs were then extrapolated by the researchers to the related CPT codes.

The work component alone does not determine the RUVs.  That component is then modified for geographic variations based on the practice location and the malpractice costs, which also tend to follow a geographic spread.

The RVU is modified with a geographic practice cost index (GPCI).  This GPCI then is used to adjust the RVU for the location of the practice.  This to accommodate the urban/rural differences in the cost of practice operation.  A factor in this index is the geographic implications related to malpractice costs. The GPCI can significantly modify the total RVU.

None of these numbers is cast in concrete.  Annually the RVUs are adjusted based upon studies that seek to measure the changes in the work input of physicians for specific CPT codes.  The new technology that speeds up a procedure or reduces the technical skill necessary can be factored into the CPT code through changes to the RVU.

Similarly, the GPCI is also adjusted annually based on the indexes of the Urban Institute and Center for Health Economics Research

The three components RVUs – work, practice expense, and malpractice- combine to form the total RVU.

RVUs are non-monetary numerical values.  They represent the relative amount of physician work, resources, and expertise needed to provide services to patients.  The definitive payment for physician services results only when conversion factors (CFs) represented by specific dollar amounts are multiplied by specific RVU.  The formula is ($ fee) = CF ($) x RVU.

Understand that the RVUs by themselves do not determine the amount of payment.  For example, an office visit may have an RVU of 1.5.  Payer A applies a CF of $30 and pays $45.  Payer B applies a CF of $40 and pays $60 for the service.

Payers including Medicare choose a CF that they will apply to the RBRVS based on strategic and financial considerations.  This means that each payer is not valuing the services differently, but that they are determining to value all services differently.  To complicate matters further, payers are now choosing to assign differing CFs to specific ranges of CPT codes.  For example, the CF for radiology may be $20, while that of E&M codes is $40. Currently, there is a movement to curtail radiology, laboratory/pathology, restraint procedures, and increase the CFs for office visits.

The Medicare fee schedule comprised of RVU is called an RBRVS – resource-based relative value scale.

Since implementation in 1992, the RBRVS is updated annually, adjusting units for existing CPT codes and setting units for new ones.  While specialty society input is sought in the process, the ultimate decision is made by Medicare.

A reality of this annual review has continued a progression that devaluates procedural services and increases recognition of cognitive services.

The researchers, even in their initial findings and in the production of the RBRVS, recognized the criticism of their recommendations.  However, as there was a recognition that a perfect system was impossible, and the political winds precluded going backward.

Private insurance organizations, indemnity insurers, and HMOs moved rapidly to adopt if not the exact schedule, then a modified version of it.  The Medicare RBRVS schedule or an RBRVS schedule is believed to rationalize the fees that were allowed.  Too often the insurance organizations relied on historical trends, which resulted in high procedural fees at the expense of primary care, preventive and routine services.  Managed care re-introduced these services and repeated documentation supported the managed care notion that primary, preventive, and routine care would result in lower medical costs by early intervention and avoidance of greater severity of illness.  The question was how to properly pay for those services.  The long-term deterioration of primary care access was also believed to be the result of a financial payment model that devalued primary care.

Reliance of an RBRVS based on Medicare is consistently problematic for those CPT codes that are not generally reflected among the services that Medicare beneficiaries experience, such as obstetrical, preventive, and pediatric codes.  Similarly, any new service or one that Medicare does not reimburse is also generally problematic.  While there are codes for some of these services; their basis in Medicare data is generally very limited or based on the small sample by eligible beneficiaries, such as Medicare disability or ESRD.  Private carriers will either use the Medicare RBRVS fee, even if not reflective of the service, or will assign a fee to these codes.  Assignment of codes of new services can often lag significantly behind the usage within the industry.

The argument continues to this day, what is the proper balance between cognitive skills and procedural skills.

The RVU Formula

Total RVU = (RVU work x GPCI work) + (RVU practice expense x GPCI practice expense) +(RVU malpractice x GPCI malpractice)

Definitions

RBRVS – resource-based relative value scale

A system of valuing physician services developed by researchers at Harvard School of Public Health and implement from Medicare in 1992.

RVU – relative value unit

A numerical value that depicts the amount of physician effort, risk, and resources for one service relative to all others.

CPT – current procedural terminology

A series of more than 7000 numerical codes each representing a unique physician service; most have established RVUs.

GPCI – geographic practice cost index

Numerical values that adjust each RVU component to account for geographic differences, primarily in practice cost and malpractice risk.

CF – conversion factor

A dollar amount multiplied by an RVU to calculate the total payment for a unique CPT code: Total payment = CF ($) x RVU.

No, you can’t hold medical information hostage for payment


 

Medical Record

Yes, lawyers can hold a client’s files until their bill is paid, such as the power of the attorney’s lobby, but refusing to provide medical records on behalf of a patient that owes you money is not a proper collection tactic.

From the standpoint of public policy, the belief is that medical care, and the information that is needed to provide that care trumps getting your outstanding bill paid.  Simple as that.

 

In fact, Federal regulations 45 CFR 164.524(c)(4) is very specific as to your right to charge an individual for a copay of their electronic health records, however, you cannot withhold or deny a patient a copy of access to that record on the grounds that they owe you money.  And in NY physicians are limited to a per page charge of $0.75 to make copies of that record.

Now the regulations that set the per-page price do not contemplate passing on the medical record in an electronic manner so the guidance would be to charge the cost of the media material and a nominal fee.  However, the regulations speak to providing the patient with a copay of the records, there is no provision that mandates that you pay for the cost of mailing or otherwise sending the records. 

 

Therefore, you may want to set up a policy that you will provide the records, but that they must be picked up by the patient or an authorized representative at your office, or that the patient provides you with a paid Federal Express or another secure delivery service.  You can invite the patient to either pick up the records, send the pre-paid delivery envelope, or pay the cost of such.  All should be received by your office prior providing.  Collecting the records by billing is unlikely.

 

6 SIMPLE WAYS TO REDUCE THE ADMINISTRATIVE BURDEN IN A PRACTICE

Now if the patient says they cannot afford to pay for the records, you are entitled to ask for documentation of their financial hardship to then waive the cost.  In such incidences, keep your cost exposure to paper copies, no mailing, require to pick up.

 

Similarly, physicians have crossed a red line when they have not reported medical testing results to patients with outstanding balances.  There is an obligation of the physician, often delegated to staff to report test results.  Not only can test results not be held up due to outstanding balances, it is the practices obligation to contact the patient with the results, it cannot and should not pass that responsibility to the patient.  Yes, you can tell them when the results are in if they choose to call, but you have to reach out and present the results if they don’t.  And do so reasonably soon after receiving the results.  This is not only good for patient satisfaction but also good for patient care, especially if those results result in the recommendation for further care or testing.

 

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CureMD Most Promising Healthcare Solution Provider

The unfortunate reality is that once medical services are provided there may be reduced interest by the patient in paying for them.  You are most at risk for non-payment on your commercial patients, where coverage and auditions, as well as nuances of approval and networks, is often confused.  Here you might want to consider contingent credit card authorizations to give you some cushion if the information you rely on from the payer as to coverage, deductible levels, and copays is less then accurate.

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Telemedicine

Telemedicine – Adding a service and revenue to your practice


Physicians have long misunderstood the cost of an office visit.  Copays, generally not more than $20 seem like a limited disincentive to an office visit.  But the cost of an office visit was never just the copay, it includes the cost of the patient’s time, and hassle to schedule, the interruption their day, travel to and from an office visit of say 20 minutes.  To the patient, what are nearly 3 hours of their time worth? A complete morning or afternoon lost to a physician office visit.  And now add to that deductible, large deductibles.  All motivating patients to find a way to access care for less.

And patients are, the use and acceptance of urgent care centers continue to grow.  While studies show that most patient understands that the use of an urgent care center is episodic and that some even say they go because they don’t want to bother the physician when they are not really that sick, convenience is the greatest draw of the centers to patients. And now with most health plans providing coverage, convenience trumps continuity of care. Continue Reading

Tips to Plan Holiday Schedule and Reduce Stress


Imagine having a follow-up appointment you scheduled for your Grandma being postponed, even though it was booked 2 months prior. This inconveniences the patient and frustrates the physician for having not met expectations.

This is a common occurrence among physicians worldwide, unavoidable at times due to emergencies or family commitments, but usually due to a lack of planning for the holidays. Unstructured scheduling of staff leads to misunderstandings amongst them and ends up adversely affecting the patients.  Focusing on the following can help:

  • Holiday Closure Policy:

This policy must list the days that some or all of the staff has off, especially non-standard days when the office could stay open. Releasing this policy early in the year can help prevent frustration for patients and staff. It will also be beneficial in planning for the holidays. Continue Reading

6 Simple Ways to Reduce the Administrative Burden in a Practice


When a small practice attempts to do everything themselves, problems will almost certainly arise. Between managing operations, scheduling, billing, account management, customer service, and providing medical attention, administrative duties can become too demanding and downright burdensome for a small staff. In fact, it may often divert attention from the core focus of providing care.

How can this be avoided? A recent discussion between MGMA Members Community provided overburdened practitioners with valuable feedback. Some were of the view that practices should outsource their administrative duties while others provided tips on how to streamline operations to reduce the burden.

Here is what they recommended:

All About MIPS: How to Prepare for this Reporting Period


Are you prepared for MIPS? As the deadline to collect data is approaching, it is time for providers to get serious about documentation to avoid penalties. MIPS reporting can be stressful, confusing, and haphazard if you are not prepared. However, in order to avoid penalties and maximize incentives, it is important to assess how you have fared. While you may require special assistance in the form of CureMD’s MIPS consultancy services to properly equip you with a penalty protection plan and help you understand how to maximize your returns, CureMD can simplify the technicalities for you. Enhance your understanding of eligibility, scoring, performance thresholds, and alternative payment models here. Get More Information on MIPS Reporting 2017

 

MIPS-Penalties-Protection-Plan

11 Fundamental Changes in the EMR Market


11 Fundamental Changes in the EMR Market.

For nearly a decade, the $28 billion Electronic Medical Record (EMR) market was on a foreseeable path with roughly 20 similarly-sized competitors and many smaller participants offering software systems and support services. A new report from Kalorama Information says the EMR market is confronting changes that will determine how healthcare providers operate moving forward. Per the report, the market is consolidating, leading to a decrease in EMR support services and creating issues for providers. To illustrate, here are 11 ways the EMR market is changing:

  1. The EMR systems market has been consolidating for years. While there are hundreds of EMR vendors today, consolidation in the industry has accelerated in recent years. In a meaningful use (MU) attestation in 2012, the top 15 EMR vendors of 336 hospitals surveyed represented 75 percent of all providers attesting. On the inpatient side, this concentration was even more pronounced with the top six representing 75 percent of total hospital attestations. Read More