Financial applications using the cost per RBRVS methodology

In this article, the resource-based relative value scale (RBRVS) is used as a basis to allocate physician salaries, malpractice insurance and practice expense to determine the cost of providing physician services. With this information, practice administrators can readily apply this cost accounting methodology to fee schedule analysis and managed care contract evaluation. Other applications of this method include determining floor capitation rates, allocating the capitation payment among the group and third party payer profitability analysis.