Resource-based Relative Value Scale (RBVS)

Financial Management Concept 

Before the introduction of the Resource-based relative value scale (RBVS) payment system in 1992 by Medicare, physicians were paid depending on the charges. Inefficiencies marred the charge-based physician payment system. Since 1992, to date, the Centre for Medicare & Medicaid Services, among other years, has opted to use the RBVS physician payment system. The fundamental principle behind this new system is that it aims at providing an improved platform to the physicians. This is through ensuring that the resource expenses used in providing a particular service are in line with the payments made for the services offered by a physician. The RBVS has continued to undergo various changes since its development, and this is spearheaded by the American Medical Association in association with the Centre for Medicare & Medicaid Services (Jacobs et al.,2017).

The RBVS payment system being resource-based is divided basing on three service components, physician work, practice payment, and professional liability insurance (Jacobs et al.,2017). When calculating the costs for this payment system, one multiplies the collective expenses of a given service by a specific monetary amount defined by the CMS and adjusted for geographic variances in resource expenses.

According to the physical components, it accounts for about 51% of the entire service relative value (Jacobs et al.,2017). There are various factors used in determining the physical work components, and these include, stress, physical efforts, technical skills, amount of time taken in offering given service and mental struggles and judgments. The practice expense components represent about 45% of the service relative value (Jacobs et al.,2017). The professional liability insurance component was implemented in 2001, and it accounts for only 4% of the service’s relative value (Jacobs et al.,2017).

Before the RBVS existence, patients and physicians complained about the complexity, in-equitability, and inflationary of the charge-based system. Congress responded to the growing concern in the public related to the uses, which led to the formation of a new system that would pay physicians. Congress adopted the RBVS, and it has become the new payment system in the USA. The main reason for selecting this financial management concept is to understand how health services are paid and priced in the USA. This will make it easier in determining whether the RBVS had provided simplicity in the physician payment method in the USA as it was required when it was introduced. Comparative Analysis 

According to Nguyen & Moffatt-Bruce (2016), the introduction of the RBVS payment system has brought about tremendous shifts in hospital reimbursement procedures. The author cites that this new system has made it more comfortable in improving the quality of services offered by healthcare facilities. Moreover, there has been a tremendous reduction in healthcare costs. Additionally, Nguyen & Moffatt-Bruce (2016) state that the RBVS plays a significant role in determining physician incentives and behavior. This will ensure that it financially rewards physicians who have brought about higher patient satisfaction rates. Likewise, health care centres have now begun focusing more on prodding better quality care. The findings from this study are very similar to those by Aroh et al. (2015), who found out that by shifting the current health care reimbursement system from a fee-for-service and volume-based system to a value-based system; it has improved the quality of care. Aroh et al. (2015) state that there was an increased need for performance in healthcare facilities that provide acute care as they focused more on patient experience and outcomes. Initially, a majority of hospitals focused on the number of patient visits, which determined the amount of reimbursement a physician would get. The higher the number of patients one served in a day, the higher the reimbursement rates. However, Aroh et al. (2015) and Nguyen & Moffatt-Bruce (2016) state that this has come to change as patient satisfaction is the critical determinant of reimbursements.

In another study by Aryankhesa et al. (2018) carried out in Iran aimed at determining the impacts of using the RBVS payment system in its health care systems. According to the author's system as adopted from the California RBVS system, this was introduced in 1992. The system reimburses physicians basing on service risks level, physician mental and technical involvement, service complication, and time spent. Aryankhesa et al. (2018) state that the out of pocket was the primary system used in reimbursing doctors in Iran. However, this came to change in 2014 following the implementation of a new health transformation policy. According to the researchers, despite the system aiming at reducing earnings inequalities and ensuring physicians earned as per their efforts, it has not yet attained the goals. Physicians have cited that there is a lack of clarity in the revisions process and its evaluation and management is still ineffective.

Additionally, the researchers found out that the system has still not yet eliminated inequalities in payments. The lack of inequality elimination is also evident in a study by Zarabi et al. (2020) among neurosurgeons in the USA. Zarabi et al. (2020) found out that in the case of spine neurosurgeons, they earn an average of $67 basing on the RBVS formula, while pediatric neurosurgeons earn an average of $111. This is an indication that pediatrics earn higher than spine neurosurgeons. There are very negative implications brought about by these differences. Most of the people will thus opt to choose careers in disciplines that have higher RBVS dollars, and this can bring about shortages in other functional surgery occupations. Additionally, those from the low earning disciplines might focus on diversifying their practice, which takes away time for them to offer services to people who needed their services thoroughly. From the two sources, it is an indication that the RBVS payment system is still marred by various challenges that require immediate action by the government.

Kliethermes (2017) states that there has been a significant increase in the changing of physician reimbursement procedures over the years. Physicians must become aware of the various reimbursement methods to avoid errors that might bring about denied claims and massive fines. The current reimbursement system is heavily reliant on HCPCS codes comprising of level 1, the CPT codes, and Level 2. The RBVS was developed to adjust the HCPCS codes, and it consists of relative value units (RVUs) aimed for each billing code. Following the introduction of these codes by RBVS, fraud, and abuse in pharmacy and clinical departments have tremendously reduced.

Furthermore, these processes offered by the pharmacists must meet the acceptable standards of health care practice. This is an indication that the HCPCS codes have played a significant role in streamlining the health care field. However, in a study by Katz & Melmed (2016), the instruction of HCPCS codes, especially CPT, has brought about significant undervaluing of the cognitive office efforts. This is majorly for diseases that are known to take a lot of time during hospital vests, such as inflammatory bowel disease. According to Katz & Melmed (2016), chronic illnesses are at times very complex, yet the RBVS has trapped them in low levels relative value units. This indicates the physician will receive very limited reimbursements from attending to such patients. Likewise, this system has made physicians prefer performing services that have higher RVUs. The results of this study are similar to those by Zarabi et al. (2020), who found out that some of the neurosurgeons are opting to diversify their practices and seek high paying RVUs services.

From the above literature review analysis of five articles, it is an indication that the RBVS system has been able to meet its intended goals of simplifying the reimbursement process. Additionally, in researches by Aroh et al. (2015), Kliethermes (2017), and Nguyen & Moffat-Bruce (2016), RBVS has transformed healthcare by improving service provisions and overall patient satisfaction. However, in studies by Zarabi et al. (2020), Katz & Melmed (2016), and Aryankhesal et al. (2018), RBVS has brought about some negative impacts despite improving health care outcomes and overall patient satisfaction. Role Application 

According to Stone (2017), the USA has one of the highest healthcare spending budgets among the developed nations. However, the USA population has one of the most unsatisfactory health outcomes and higher health risk factors. This is an indication that there is a need for coming up with innovative strategies that will help improve the USA population health outcomes. The physician workforce specialty plays a significant role in affecting the cost and quality of healthcare. As the RBVS systems have brought about inequalities in the reimbursements among physicians, as evidenced by (Zabari et al., 2020). As a nurse leader, there is a need to launch campaign awareness programs targeting medical students and encourage them not only to pursue well-reimbursed specialties.

Additionally, the increased health care payment disparities brought about by RBVS as the primary reasons why primary care is facing a crisis in the USA. As a nurse leader, there is a need to come up with some in-house performance evaluation matrixes that will reward physicians for clinically effective and high-quality performance (Kaye et al., 2014). The implementation of such models will help in encouraging the physicians to continue performing much better hence increasing patient satisfaction.

References 

Aroh, D., Colella, J., Douglas, C., & Eddings, A. (2015). An Example of Translating Value-Based Purchasing Into Value-Based Care.  Urologic Nursing ,  35 (2).

Aryankhesal, A., Meydari, A., Naghdi, S., Ghiasvand, H., & Baghri, Y. (2018). Pitfalls of Revising Physicians’ Relative Value Units (RVUs) in Iran: A Qualitative Study on Medical Practitioners’ Perspective.  Health Scope ,  7 (S).

Jacobs, J. P., Lahey, S. J., Nichols, F. C., Levett, J. M., Johnston, G. G., Freeman, R. K., ... & Kanter, K. R. (2017). How is physician work valued?  The Annals of Thoracic Surgery ,  103 (2), 373-380.

Katz, S., & Melmed, G. (2016). How relative value units undervalue the cognitive physician visit: a focus on inflammatory bowel disease.  Gastroenterology & Hepatology ,  12 (4), 240.

Kaye, A. D., Okanlawon, O. J., & Urman, R. D. (2014). Clinical performance feedback and quality improvement opportunities for perioperative physicians.  Advances in Medical Education and Practice ,  5 , 115.

Kliethermes, M. A. (2017). Understanding health care billing basics.  Pharmacy Today ,  23 (7), 57-68.

Nguyen, M. C., & Moffatt-Bruce, S. D. (2016). Relative value unit transformation: Our new reality of worth.  International Journal of Academic Medicine ,  2 (1), 52.

Stone, P. W. (2017). Determining value in the US healthcare system.  Nursing Economics ,  35 (3), 142-145.

Zarabi, H. H., Omofoye, O. A., & Girgis, F. (2020). Salary Trends across American Subspecialties in Academic Neurosurgery.  World Neurosurgery .