Developing a Relative Value-Based Fee Schedule  

Category: Coding

The resource-based relative value scale was implemented by CMS--or HCFA, as it was known at the time--for the Medicare physician fee schedule in 1992. In 2002, it transitioned wholly to a resourced-based methodology. Relative value units are updated annually. The conversion factors are driven by government budgetary requirements. Specialty societies and individuals are invited to submit comments and participate in relative value unit (RVU) evaluations.

Components of the resource-based relative scale (RBRVS) include a work value, which is the physician skill and treatment time, a practice expense, which are the practice management expenses (labor and non-labor) for facility and non-facility, and a malpractice value, which are malpractice insurance premiums. The formula is displayed as: Work + Practice + Malpractice = Total RVU. Another example can be demonstrated as: