Physician rewards for different kinds of service: the RBRVS versus the CPR system

The resource-based relative value scale (RBRVS) was introduced in 1992 by Medicare for payments to physicians. This replaced the previous system based on the physician's customary, prevailing, and reasonable (CPR) charges. This paper analyzes the RBRVS from two perspectives: (1) the economic logic of the system and (2) how it functions differently from the CPR system in practice. As a social pricing system, it can make sense under certain conditions. However, when we provided a test for a New York plastic surgeon of the alleged underpricing of evaluative relative to procedural services under CPR, we found evidence to the contrary.