Fee schedules based on Medicare's Resource Based Relative Value Scale
Many commercial payers compensate physicians using fee-for-service methodologies that are purportedly based on Medicare’s Resource-Based Relative Value Scale (RBRVS) or the Medicare Physician Fee Schedule (MFS). References to the Medicare RBRVS or the MFS may be highly ambiguous, though. Ambiguous references may lead you to make erroneous assumptions concerning how much you can expect to be paid and the payer’s method of calculating payments.A reference to the Medicare RBRVS or to the MFS might lead you to assume that the payer will calculate payments based on the relative values that the current Medicare RBRVS assigns to your services, or that payment will be based on the amount that Medicare actually pays you for a particular service. These assumptions may be incorrect. For example, the commercial payer may not assign the same values that the Medicare RBRVS assigns to the Work, Practice Expense or Professional Liability Insurance components of your services.
The AMA has created three educational resources to help physicians evaluate managed care contracts that purport to base payment on the Medicare RBRVS or the MFS.
- "Protect your payment: Key questions to resolve prior to signing a contract purporting to base payment on the Medicare Resource-Based Relative Value Scale or the Medicare Physician Fee Schedule" explains the various elements of the Medicare RBRVS and MFS, in order to help physicians understand which questions they may need to ask managed care organizations about their payment rates and policies before signing or renewing contracts.
- A clear understanding of the physician’s payment under each managed care contract is crucial to the initial decision of whether to contract with a specific managed care organization, as well as to the physician practice’s ability to reconcile claims payment moving forward. The AMA has created a one-page checklist for physicians to use when evaluating a specific contract that references the Medicare RBRVS or MFS.
- A longer companion piece, "Fee schedules based on Medicare’s Resource-Based Relative Value Scale or the Medicare Physician Fee Schedule," details the rationale underlying the checklist for physicians who are interested in more specifics.
In addition, the AMA’s National Managed Care Contract contains provisions specifically addressing circumstances in which managed care organizations utilize an RBRVS system to calculate your reimbursement. For instance, under the National Managed Care Contract, if a payer uses a relative value system to determine your compensation, the payer must provide you with the following, upon request:
- the name of that relative value system;
- the version, edition, or publication date of the relative value system; and
- any applicable conversion factor or geographic factor or adjustment applied to that relative value system.