Resource-based relative-value scale expansion: implications for performance and quality of care

To assess the impact on the delivery of physician services from expanded use of Medicare's Resource-Based Relative-Value Scale (RBRVS) by multiple payers.

A 1993 survey of insurers and targeted case studies of payers.

Approximately one third of surveyed payers were using RBRVS in some fashion to pay for physician services, while another 40% were considering its adoption. The RBRVS is spreading to many types of payers--both public and private--and to health insurance product lines. Penetration of RBRVS is most prevalent within managed-care arrangements, accounting for 75% of all RBRVS-based products among payers. Many payers were found to be modifying aspects of the RBRVS and applying payment policies tailored to their specific needs. Most payers expect to achieve cost control, and several may be using RBRVS to profile physician service utilization.

The diffusion or RBRVS to multiple payers may have a profound impact on the distribution of services provided, how these services are delivered, and the quality of care provided. Providers may respond to RBRVS by reducing some types of services, while increasing others, and using new resource combinations. Managed-care payers are likely to continue using RBRVS for negotiating fee schedules or for allocating payments for bundled service packages and capitation and sub-capitation products among physicians. As larger shares of physicians' incomes are driven by RBRVS, the underlying incentives become more critical. Nevertheless, RBRVS will remain an important payment approach in the future. The impact on quality and delivery of physician services from broader use of RBRVS cannot be measured adequately until future empirical studies are undertaken.