The RBRVS and hospitals: the physician payment revolution on our doorstep

As the months count down to the scheduled Jan. 1, 1992, implementation of Medicare physician payment reform, physicians and hospital administrators are still uncertain as to precisely how the new payment rules will affect them. But when it does kick in, the Health Care Financing Administration's implementation of the resource-based relative value scale (RBRVS) is sure to transform both physician reimbursement and physician-hospital relations. Experts expect HCFA to use the RBRVS to raise reimbursement for primary care at the expense of specialty care; that could lead to tension between hospitals and specialty physicians, as those specialists pressure hospitals to help them make up for income losses. What's more, HCFA is already planning for the possibility that specialists hit by the RBRVS will raise their Medicare volume to recoup reimbursement declines. Just how successfully an individual hospital weathers the coming payment revolution will depend on its mix of specialties and its medical staff relationships. It's also clear, according to experts, that RBRVS implementation will create a strong incentive for hospitals to enter joint ventures or other arrangements with physicians for outpatient services.