EurekaMag.com logo
+ Site Statistics
References:
53,623,987
Abstracts:
29,492,080
+ Search Articles
+ Subscribe to Site Feeds
EurekaMag Most Shared ContentMost Shared
EurekaMag PDF Full Text ContentPDF Full Text
+ PDF Full Text
Request PDF Full TextRequest PDF Full Text
+ Follow Us
Follow on FacebookFollow on Facebook
Follow on TwitterFollow on Twitter
Follow on LinkedInFollow on LinkedIn

+ Translate

RBRVS costing: the inaccurate wolf in expensive sheep's clothing



RBRVS costing: the inaccurate wolf in expensive sheep's clothing



Journal of Health Care Finance 34(3): 6-18



Resource-Based Relative Value Scale (RBRVS) costing has been promoted as an accurate cost allocation methodology and has gained popularity in recent years as a way to support many aspects of medical practice management. In this article, we demonstrate that RBRVS (also known as relative value unit (RVU) costing), is simply an overly complex form of revenue-based cost assignment and is identical to ratio of cost to charges (RCC) and percent revenue cost assignment approaches. However, this equivalence can be easily obfuscated by routine numerical manipulations used in financial analysis for many aspects of practice management. Further we show that since RBRVS cost systems assume all procedures and hence providers earn the same profit margin, the reported costs derived from this analysis in complex medical settings are highly inaccurate. Reported costs are highly inaccurate because the equal profit margin assumption is inappropriate in most, if not all, medical settings. Furthermore, the equal profit margin assumption is in direct contradiction to the conceptual design of the RVU system where value is increased according to complexity and skill of a procedure. Finally, we demonstrate, no fundamental improvement is achieved in the accuracy of reported costs through the adoption of the more complicated component RBRVS approach. With medical costs at the forefront of the national agenda it is important that costs reported to the Centers for Medicare & Medicaid Services (CMS) and subsequently used in setting RVUs are accurate.

(PDF emailed within 1 workday: $29.90)

Accession: 055333694

Download citation: RISBibTeXText

PMID: 18468375



Related references

Money-Back Guarantees for Expensive Drugs: Wolf's Clothing but a Sheep Underneath. Annals of Internal Medicine, 2018

Role of MRI in low-risk prostate cancer: finding the wolf in sheep's clothing or the sheep in wolf's clothing?. Current Opinion in Urology 27(3): 238-245, 2017

Seizure and Psychosocial Outcomes of Childhood and Juvenile Onset Generalized Epilepsies: Wolf in Sheep's Clothing, or Well-Dressed Wolf?. Epilepsy Currents 15(3): 114-117, 2015

A wolf in sheep's clothing. Journal of Thoracic and Cardiovascular Surgery, 2017

A sheep in wolf's clothing?. Journal of Family Practice 66(7): E1-E4, 2017

BSE - a wolf in sheep's clothing?. Trends in Microbiology 10(12): 563-570, 2003

A sheep in wolf's clothing. Hno 56(9): 920-924, 2008

A wolf in sheep's clothing. Ophthalmology 95(2): 149-150, 1988

A sheep in wolf's clothing?. Journal of Cardiovascular Electrophysiology 18(12): 1338-1339, 2007

A wolf in sheep's clothing. Practical Neurology 16(2): 153-156, 2015

A sheep in wolf's clothing. Hospital Practice 24(9): 153-156, 1989

A sheep in wolf's clothing. Blood 117(5): 1438-1439, 2011

IL-33: a sheep in wolf's clothing?. Science's Stke 2007(390): Pe31-Pe31, 2007

The sheep in wolf's clothing. British Journal of Radiology 70(833): 543-544, 1997

A sheep in wolf's clothing. Hepatology 38(6): 1596-1601, 2003