Applying a Resource-Based Relative Value System to Your Practice
The payment policy for United States physicians was formerly based on determination of customary and prevailing charges from their fee schedules. Rapidly growing health care expenditures in the 1980s led to a fundamental change in payment reimbursement in which the new system was based on the resource costs to the physician for providing health care services. This reform highlights the significant regulatory morass that has come to burden the health care industry. One of the most critical changes in physician reimbursement was caused by the Congressional mandate that led to the development of a resource-based relative value scale (RBRVS) for the creation of the Medicare physician fee schedule. Most physicians, however, have limited familiarity with the RBRVS system, which now serves as the basis for Medicare-related physician reimbursement as well as many third-party payers. A historical review of the development of the RBRVS will serve as the basis for applying the methodology to improve the effectiveness of the neurosurgeon's practice.
Understanding payment systems by which physicians are reimbursed for their services has not been emphasized in practice management until the past decade. The progressive reduction in reimbursement to physicians has drawn significant attention to the education of physicians in modern coding and reimbursement systems, which serve as the basis for these changes. Moreover, recent federal investigations into alleged fraudulent Medicare billing practices have demonstrated that an understanding of these methods is essential for the physician. In this paper, the author reviews the historical evolution of reimbursement methods. By appreciating the underlying rationale of these methods, neurosurgeons can adapt the relative value system to manage their practice successfully.
The payment policy for United States physicians was formerly based on determination of customary and prevailing charges from their fee schedules. Rapidly growing health care expenditures in the 1980s led to a fundamental change in payment reimbursement in which the new system was based on the resource costs to the physician for providing health care services. This reform highlights the significant regulatory morass that has come to burden the health care industry. One of the most critical changes in physician reimbursement was caused by the Congressional mandate that led to the development of a resource-based relative value scale (RBRVS) for the creation of the Medicare physician fee schedule. Most physicians, however, have limited familiarity with the RBRVS system, which now serves as the basis for Medicare-related physician reimbursement as well as many third-party payers. A historical review of the development of the RBRVS will serve as the basis for applying the methodology to improve the effectiveness of the neurosurgeon's practice.
Understanding payment systems by which physicians are reimbursed for their services has not been emphasized in practice management until the past decade. The progressive reduction in reimbursement to physicians has drawn significant attention to the education of physicians in modern coding and reimbursement systems, which serve as the basis for these changes. Moreover, recent federal investigations into alleged fraudulent Medicare billing practices have demonstrated that an understanding of these methods is essential for the physician. In this paper, the author reviews the historical evolution of reimbursement methods. By appreciating the underlying rationale of these methods, neurosurgeons can adapt the relative value system to manage their practice successfully.
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