2013 RBRVS: What is It and How Does It Affect Pediatrics

The Centers for Medicare and Medicaid Services (CMS) implemented the Medicare Resource-Based Relative Value Scale (RBRVS) physician fee schedule on January 1, 1992. The Medicare RBRVS physician fee schedule replaced the Medicare physician payment system of “customary, prevailing, and reasonable” (CPR) charges under which physicians were paid according to the historical record of the charge for the provision of each service. The current Medicare RBRVS physician fee schedule is derived from the “relative value” of services provided and based on the resources they consume. The relative value of each service is quantifiable and is based on the concept that there are three components of each service: the amount of physician work that goes into the service, the practice expense associated with the service, and the professional liability expense for the provision of the service. The relative value of each service is multiplied by Geographic Practice Cost Indices (GPCIs) for each Medicare locality and then translated into a dollar amount by an annually adjusted conversion factor. The dollar amount derived from this calculation is the Medicare payment amount for the provision of a particular service. It is critical to note that 77% of public and private payers, including Medicaid programs, have adopted components of the Medicare RBRVS to pay physicians, while others are exploring its implementation. More information on RBRVS.

 

 

 

The physician work component of the Medicare RBRVS physician fee schedule is maintained and updated by CMS with input from the American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee (RUC). The RUC is composed of 31 members, consisting of 22 representatives from major medical specialty societies, as well as representatives from the American Medical Association, the American Osteopathic Association, the Health Care Professionals Advisory Committee, the Practice Expense Subcommittee, and the CPT Editorial Panel. The American Academy of Pediatrics (AAP) holds one of the 23 seats designated for medical specialty society representation. CMS reviews and, if necessary, modifies the RUC-recommended relative value units (RVUs) of physician work and establishes payment policy, which is published in the Federal Register (http://www.cms.hhs.gov/PhysicianFeeSched/).

 

The physician work component represents approximately 52% of the total RVUs for each service. Physician work is divided into pre-service, intra-service, and post-service periods that equal the total value of work for each service. The total value of physician work contained in the Medicare RBRVS physician fee schedule for each service consists of the following components:

 

The practice expense component represents approximately 44% of the total RVUs for each service. In 2002, an initial four-year transition to resource-based practice expense RVUs was completed. A second four-year transition using a revised practice expense methodology started in 2007 and was completed in 2010. A third four-year transition started in 2010, during which CMS will undertake additional practice expense revisions using: 1) the results of the Physician Practice Information (PPI) Survey, sponsored by the AMA and 72 medical specialty societies and health professional organizations; and 2) the assumption that diagnostic imaging equipment such as CT and MRI are in use 90 percent of the time that an office is open instead of 50 percent of the time.

 

CMS uses many sources and methodologies to determine practice expense RVUs. Beginning in 1998, some CPT codes were assigned two (2) practice expense RVUs: a lesser one for procedures performed in a facility (ie, a hospital, skilled nursing facility, or ambulatory surgical center) and a greater one for procedures/services performed at a non-facility site (ie, physician’s office or patient’s home). This policy continues for 2013.

 

 

Professional liability insurance (malpractice) expense relative values amount to approximately 4% of the physician fee schedule payment. CMS replaced the cost-based professional liability insurance relative values with resource-based professional liability insurance RVUs in 2000. The end result of its computations was to retain the same total professional liability insurance RVUs as they were under the charge-based system.

 

Since Medicare is statutorily required to review, and if necessary, adjust the malpractice RVUs no less than every 5 years, revisions were implemented in 2010 based on an updated and expanded malpractice premium data collection.

 

 

On the Medicare physician fee schedule, each CPT code is assigned a designation in the Medicare “global period” column. Medicare Global Periods define the post-operative period for procedures and affect how follow-up services are reported for a given CPT code. The Medicare Global Period designations are defined as follows:

​Medicare Global PeriodDesignation	​Definition	​Explanation
​000	​Zero-day Medicare Global Period	​Payment for a 0-day global code includes the procedure/service plus any associated care provided on the same day of service (eg, 54150)
​010	​Ten-day Medicare Global Period	​Payment for a 10-day global code includes the procedure/service plus any associated follow-up care for 10 days (eg, 24640)
090​	​Ninety-day Medicare Global Period	​Payment for a 90-day global code includes the procedure/service plus any associated follow-up care for 90 days (eg, 25600)
​XXX	​The Medicare Global Period concept does not apply	​Payment for an XXX code includes only the procedure/service (eg, 90460)
​ZZZ	​Code related to another service that is always included in the Medicare Global Period of another service	​Payment for a ZZZ code includes only the procedure/service; ZZZ codes are usually add-on codes to XXX codes (eg, 90461)
​YYY	​The global period is to be set by the carrier	​This designation is usually reserved for unlisted surgery codes (eg, 24999)

• Pre-operative visits: Pre-operative visits after the decision is made to operate beginning with the day before the day of surgery for major procedures and the day of surgery for minor procedures
• Intra-operative services: Intra-operative services that are normally a usual and necessary part of a surgical procedure
• Complications following surgery: All additional medical or surgical services required of the surgeon during the post-operative period of the surgery because of complications which do not require additional trips to the operating room

• Cost of Living GPCI: Applied to physician work relative values
• Practice Cost GPCI: Applied to practice expense relative values
• Professional Liability Insurance Cost GPCI: Applied to professional liability insurance relative values