RBRVS payment model emerges as horse of a different color
RBRVS payment model emerges as horse of a different color
Practices look to RBRVS as equitable compensation tool
Is Medicare’s resource-based relative value scale (RBRVS) an Edsel? Far from it. It’s simply a refurbished model of an old standby parked at large medical group practices everywhere, buffed and shined and tuned up.
You might miss the RBRVS craze if you get caught up in too much news from the nation’s capital. You’ll hear Medicare officials downplaying RBRVS in favor of capitation for Medicare contracting.
But if you look closely at individual practices, RBRVS the former Medicare icon of payment is now close to being adopted as a widespread compensation model that will be as ubiquitous at large practices as the parking decks that wrap around them.
The reason? Many compensation experts view RBRVS as fair. It’s also viewed as a way to transform medicine from the old industrial model in which increased production brings increased payment to a more post-modern paradigm that factors in benefit for thoughtful, time-consuming diagnosis. To Donald W. Fischer, PhD, chief executive officer of the American Medical Group Association (AMGA) in Alexandria, VA, that’s a history-making transformation in the medical field.
Production will always play a key role in income distribution, but it is less a factor now than it has been historically, Fischer says, pointing to the organization’s recently released survey on physician compensation trends and productivity among 272 large group practices across the country.
Leaders attempt to make RBRVS payer blind’
Efficiency will be in part measured and rewarded via RBRVS' relative value units (RVUs). By using RVUs, compensation formulas for physicians will be "payer blind" (that is, the practice will set the conversion factor, not each insurer), and compensation will focus on work effort, not just volume.
This new way of measuring productivity gives physicians the incentive to deliver better, more comprehensive care while being prudent stewards of their group’s resources, according to Fischer’s vision.
A work team of large practice administrators who are AMGA members is completing research in hopes of unveiling widespread RBRVS-driven compensation plans as early as 1998.
"We’re seeing large insurance plans tagging everything to RBRVS, as well as employer groups when they bargain for contracts," says Glen Bardon, an AMGA team member and chief executive officer at the Watson Clinic in Lakeland, FL. Many of these groups are using RBRVS as the payment model, and then negotiating the conversion factor to establish payment levels.
You might find RBRVS hidden in your cap
Ironically, the same logic is being applied to groups with capitation dollars. Capitation payments for physicians may well be distributed based on RVUs within RBRVS and pegged to a specialty-specific conversion factor. "We are looking at how to peg things initially to RBRVS," says Bardon.
Some issues have yet to be resolved. For example, pediatric RVUs aren’t yet a part of Medicare. In other modified payment models, such as the RVU-based Medicaid program in Texas, pediatric RVUs have been historically too low, says Bardon. Despite those hurdles, however, many practice officials say RBRVS will be the route they’ll take. You may see RBRVS logic less in Medicare and more in your direct paycheck.
"What we’re experimenting with in primary care is using panel size as a basic indicator of return of dollars, and then looking at how the individual physician matches up with his or her peer group in number of referrals," Bardon says. "Then, with specialists, we’re looking at using RBRVS for payment."
Other components may well join RBRVS in the overall formula, predicts Donald Lloyd, FACMPE, chief executive officer of the Murfreesboro Medical Clinic and Surgicenter in Murfreesboro, TN. Lloyd also is immediate past president of the Medical Group Management Association (MGMA) of Englewood, CO. For example, Lloyd is grappling with how to assign a numerical component to categories such as patient satisfaction scores, outcomes data, and even community leadership activities among physicians in his practice. He says these factors add intrinsic value to the practice.
MGMA members, too, are looking to factor RBRVS into physician compensation, along with other components such as patient satisfaction scores and patient outcomes.
"Some of the large multispecialty clinics are starting to build an RBRVS methodology into their compensation plan," says Thomas Dobosoenski, CPA, managing partner of Rochester, MN-based McGladrey & Pullen, and key author of AMGA’s compensation survey.
"It’s a fairly good measure of the work effort put out by the individual doctors within a department," Dobosoenski says. "So far, we haven’t used it across departments yet. We still think there is some procedural bias to the RVUs. When you keep it within the same department, however, you minimize that issue because everyone is affected in the same way. I think it’s been pretty well received."
As the AMA/HCFA coding review team completes its five-year review, expected by year-end 1997, these inter-specialty disagreements may be ironed out, many experts suggest. At the same time, work groups such as AMGA’s are attempting to accomplish the same task within their membership.
These doctors aren’t losing money
The good news in all this is that physicians at least those in large practices where such sweeping payment models can be implemented are coming out as the winners, says Dobosoenski.
The 1996 AMGA survey data shows that physicians in large groups aren’t experiencing the payment losses so widely sustained by many other physicians across the country in smaller or solo practices (See related story in Physician’s Payment Update, December 1996, p. 177.) "One thing that intrigued me is that as we looked at larger multispecialty clinics, we saw compensation still going up," he says.
"We didn’t see what some of the other surveys were staying that compensation was going down. Physicians in large groups were reporting payments as staying flat or going up. What’s that telling us? Maybe in fact they [large groups] can sustain growth even when reimbursement is not as high as it used to be. They are tapping into economies of scale and good management techniques. In a lot of cases, they have administrators who have an awful lot of management expertise."
In many cases, small single-specialty groups are forming larger organizations to tap into these same advantages, Dobosoenski says.
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