2006 Resource-Based Relative Value Scale

Abstract

The Centers for Medicare and Medicaid Services (CMS) published the 2006 Medicare Resource-Based Relative Value Scale (RBRVS) on its Web site (http://www.cms.hhs.gov) on November 2 and in the Federal Register on November 21, 2005. These relative value units (RVUs) are important because many state Medicaid programs and other third-party payers use them as a basis for their reimbursement policies.The total RVUs for a code are made up of resource-based relative values for work, practice expenses (facility and non-facility), and malpractice expenses. Medicare assigns geographic practice cost indexes (GPCIs) that reflect the relative costs associated with physician work, practice expenses, and malpractice expenses in Medicare localities compared with national average relative costs. A Medicare conversion factor (CF) is then established to allow conversion of RVUs into the payments used to reimburse physicians for Medicare services. The 2006 Medicare CF is $36.1770, a decrease of 4.5% from last year’s CF of $37.8975.Total the physician work, practice expense (facility or non-facility), and malpractice RVUs. Multiply that total by the appropriate GPCIs for your area or locality. Multiply the total adjusted RVUs by the Medicare CF.Total the physician work, practice expense (facility or non-facility), and malpractice RVUs. Multiply that total by a payer-specific or practice CF.The new Current Procedural Terminology (CPT®) codes with assigned RVUs are listed in the Table. Note that RVUs have not yet been assigned to the new codes for moderate sedation, after-hours services, and domiciliary and home care plan oversight.Remember that some payers will apply their own relative value adjustments or use their own CFs. It is important tounderstand the basis they use to determine their payment rates. The importance of understanding RBRVS cannot be overemphasized. Every practice should be aware of its costs associated with each service or procedure and be able to calculate relative values.The American Academy of Pediatrics has developed a detailed summary of RBRVS and its effect on pediatrics that includes a table of the most common RVUs for your use. You can access this information at http://www.aap.org/visit/RBRVSbrochure.pdf.You can find the complete list of RVUs and GPCIs at http://www.cms.hhs.gov/apps/pfslookup.