The research has define Resource-based Relative Value Scale as the value of medical services associated with time and skill level needed to perform the services. When RBRVs were formed, it was started out as third-party reimbursement. The third-party payer would pay for medical services by looking at the customary, prevailing and reasonable charge. Services that were similar were not paid the same in every geographic area or clinic to clinic (Dietz & Eide). But, now RBRVs have branched out to evaluate provider’s productivity, look at the third-party contracts profitability, form fee schedule and cost analysis (Dietz & Eide).
In 1992, when RBRVs started healthcare management associations suggested that RBRVs be used as cost accounting tools: evaluate provider productivity, form physicians compensation …show more content…
This made the fee schedule of reimbursing providers have national uniform relative values for all services performed by providers. With that beginning part in place Congress always wanted uniformed coding system to decrease variations that physicians use in their clinics, nursing homes and hospital visits. Putting this in effect would generate CPT codes for every type of medical service performed and RBRVs. All the CPT codes will have relative value based on resources to provide that service. When Medicare is setting a relative value unit (RVU) is looks at geographic location, where it has assigned a region an adjustment amount by using Geographic Practice Cost Indices