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Related Experiment Videos

RVU costing in a medical group practice.

M F Berlin1, B P Faber, L M Berlin

  • 1D.J. Sullivan and Associates, Ann Arbor, MI, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|September 4, 1997
PubMed
Summary
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Medical groups should use cost accounting with the resource-based relative value scale (RBRVS) to track physician service costs. Combining relative value units (RVUs) and component RVUs provides a cost range for adequate reimbursement.

Area of Science:

  • Healthcare Management
  • Medical Economics
  • Health Services Research

Background:

  • Risk-and-reward reimbursement models are increasingly common in healthcare.
  • Accurate cost assessment is crucial for medical group practices to navigate these new payment structures.
  • The resource-based relative value scale (RBRVS) is a standard for determining physician fees based on resource utilization.

Purpose of the Study:

  • To evaluate cost accounting methods for medical group practices within the RBRVS framework.
  • To determine how different cost-per-procedure methods impact the calculation of physician service costs.
  • To provide a method for ensuring adequate reimbursement for services rendered by physicians.

Main Methods:

  • Utilized two distinct cost-per-procedure accounting methods within the RBRVS system.

Related Experiment Videos

  • Method 1: Employed standard relative value units (RVUs).
  • Method 2: Utilized component RVUs, breaking down costs into work, practice, and malpractice expenses.

    • Main Results:

    • The two cost-per-procedure methods yielded different calculated costs for physician services.
    • Integrating both RVU and component RVU methods generated a cost range.
    • This cost range can assist administrators in verifying adequate reimbursement levels.

    Conclusions:

    • Cost accounting is essential for medical practices operating under RBRVS.
    • Employing both RVU and component RVU methods offers a comprehensive approach to cost analysis.
    • A dual-method approach ensures medical practices can adequately cover the costs of physician-delivered services.