The 2007 Resource-Based Relative Value Scale

Abstract

The Centers for Medicare & Medicaid Services published the 2007 Medicare Resource-Based Relative Value Scale (RBRVS) in the Federal Register on December 1, 2006. You can access it on the CMS Web site at www.cms.hhs.gov/PhysicianFeeSched/.Why are these Medicare relative value units (RVUs) so important to your practice? Many state Medicaid programs and other third-party payers use the Medicare RVUs to establish their own payment policies. However, some payers do not use the Medicare RVUs and will establish their own relative values. It is extremely important that each practice understand the basis a payer uses to determine its payment rates.The total RVU for a given Current Procedural Terminology (CPT®) code is the total of all the associated work and expenses (practice and malpractice expenses) based on the national average relative costs. For most codes, practice expenses are established for both facility (eg, hospital) and non-facility (eg, office) settings.A geographic practice cost index (GPCI) is assigned by Medicare to reflect the relative costs associated with physician work, practice expenses, and malpractice expenses in each Medicare locality. A Medicare conversion factor (CF) is then established and used to convert the RVUs into payments for Medicare services. The 2007 Medicare CF is $37.8975, the same as last year.To calculate the Medicare payment rate, multiply the total geographically adjusted RVU (RVUs for physician work, facility or non-facility practice expense, and malpractice expense multiplied by the GPCI for your area or locality) by the Medicare CF.To calculate the non-Medicare payment rate, multiply the total RVU (physician work, facility or non-facility expense, malpractice expense) by a payer-specific or practice CF. (Most payers, including state Medicaid programs, will establish their own CF.)The Table provides you with the Medicare relative values for some of the new and revised 2007 CPT codes. As reported in the November 2006 (Vol 2, No. 2) issue of Pediatric Coding Companion™, revisions have been made to many of the physician work RVUs for 2007. Therefore, the revised relative values for some evaluation and management services have also been provided. You can access the complete list of RVUs and the GPCIs for your area at www.cms.hhs.gov/apps/pfslookup. You may also find an updated list of the most commonly performed pediatric procedures with the associated RVUs at www.aap.org/visit/RBRVSbrochure.pdf.