Question

What is the purpose of RBRVS type of reimbursement system? Briefly explain how RBRVS works?

Answer 1

• RBRVS is a physician payment scheme employed by Medicaid and Medicare services. Its purpose is to make the payment scheme uniform while considering the geographical variances in rates. This scheme considers cost of resouces for determining payment to physicians instead of basing it on their charges.

The amounts to be paid are determined by the resource costs incurred, with each service divided into three components:

• Physician work
• Practice expense
• Professional liability insurance (PLI)

They have respective weights of 54%, 41% and 5%

Payments are calculated by the product of the combined costs of a service and a conversion factor (a monetary amount fixed by CMS)