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Use of the resource-based relative value scale for private insurers
1Division of Health Policy and Administration, Yale University School of Medicine.
Health Affairs (Project Hope)
|January 1, 1994
Summary
The Resource-Based Relative Value Scale (RBRVS) can be applied by private insurers for pricing and claims analysis. A study calculated a $42.24 conversion factor for Travelers Insurance using RBRVS methodology.
Area of Science:
- Health Economics
- Medical Insurance Policy
Background:
- Medicare implemented the Resource-Based Relative Value Scale (RBRVS) in 1992 for physician payment.
- The RBRVS system assigns a relative value unit (RVU) to medical services.
Purpose of the Study:
- To determine the applicability of the RBRVS methodology for private insurers.
- To demonstrate the use of RBRVS for pricing and analyzing claims expenditures in the private sector.
Main Methods:
- Calculated a conversion factor using the RBRVS methodology.
- Utilized The Travelers Insurance Company's Large Case Norms Extract (1990) for active employees.
Main Results:
- A conversion factor of $42.24 was calculated for Travelers Insurance's group health plan business.
- The RBRVS methodology proved applicable for private insurer analysis.
Conclusions:
- The RBRVS offers valuable applications for private insurers in pricing strategies.
- RBRVS can enhance the analysis of claims expenditures for private health plans.