Refinement and expansion of the Harvard Resource-Based Relative Value Scale: the second phase

Contemplating Health Economics, Coding and Reimbursement in Orthotics, Prosthetics and Pedorthics

Reimbursement to U.S. healthcare service providers is largely transitioning from fee for service to fee for value for those clinicians who code using current procedural terminology and through their coding, describe their professional services. The Orthotic, Prosthetic and Pedorthic profession (O&P), currently codes using a system that describes the devices they evaluate for, fabricate, fit and maintain and their professional services are incorporated into their codes. These O&P codes, in contrast to those for other healthcare disciplines, are predominantly product based rather than service based, focusing on product features and function more than clinical service. This editorial manuscript provides a brief overview of the system the US O&P profession uses currently, particularly in the context of other healthcare professions transitioning to value based coding and reimbursement and culminates in a call to action for the profession to academically consider the strengths and weaknesses of the current system relative to alternative systems.

Measuring work complexity for acute care services

Case weights capture the resource cost by diagnosis-related group (DRG) but may not fully reflect the complexity of the clinical services provided. This study describes the use of a work complexity index (WCI), for assessing acute care services focusing on those provided by physicians in healthcare systems. The services are classified using relative value units (RVUs) and their point value assigned using the resource-based relative value scale. 57,559 acute inpatients from a tertiary hospital were first classified into diagnosis-related groups, which together with the relative value units assigned to services were then used to calculate a work complexity index for 38 departments. A case mix index (CMI) was also compiled as a conventional measure of complexity which had a correlation of 0.676 (p < 0.001) with the WCI. The correlation between the WCI and the RVUs representing the weighted volume of physician activities was 0.342 (p = 0.036). The WCI represents a more output or activity focused measure of complexity whereas the CMI is more patient focused and thus provides better insights into Departments' productivity. Although this paper focuses on physicians, the WCI can be easily extended to include other clinical services.

Measuring the differences in work ratios between pediatric and adult ophthalmologic examinations

PURPOSE

To assess the differences in work needed for pediatric and adult ophthalmologic examinations.

METHODS

Seven ophthalmology residents conducted slit-lamp and refraction examinations on children 3-7 years of age and adults 20-69 years of age. The examiners reported the magnitude estimate (ME) of their work in relation to two references (cross-reference ME): average adult examination and average pediatric examination. The examination time was also measured.

RESULTS

For the slit-lamp examination, 50 children and 58 adults were recruited. The ME was 1.45 (95% CI, 1.30-1.62) times higher for the pediatric examinations than for the adult examinations when the reference was an average adult case. With respect to time, the pediatric examinations took 1.22 (95% CI, 1.06-1.41) times longer than the adult examinations. For the refraction examinations, 58 children and 96 adults were recruited. The ME was 1.35 (95% CI, 1.21-1.52) times higher for the pediatric examinations. The pediatric examination took 1.32 (95% CI, 1.16-1.50) times longer than the adult examination. The cross-reference ME ratios measuring the pediatric over adult examinations against both the pediatric and adult reference cases were equivalent in both the slit-lamp and the refraction examinations; however, the ME and time ratios of the pediatric over the adult examinations were not equivalent for the slit-lamp or for the refraction examinations.

CONCLUSIONS

The cross-reference ME showed that pediatric ophthalmologic examinations require more work than the adult examination with validity and reliability. The time estimate was insufficient as a single indicator for work estimation.

A multidisciplinary approach to vascular surgery procedure coding improves coding accuracy, work relative value unit assignment, and reimbursement

BACKGROUND

Vascular surgery procedural reimbursement depends on accurate procedural coding and documentation. Despite the critical importance of correct coding, there has been a paucity of research focused on the effect of direct physician involvement. We hypothesize that direct physician involvement in procedural coding will lead to improved coding accuracy, increased work relative value unit (wRVU) assignment, and increased physician reimbursement.

METHODS

This prospective observational cohort study evaluated procedural coding accuracy of fistulograms at an academic medical institution (January-June 2014). All fistulograms were coded by institutional coders (traditional coding) and by a single vascular surgeon whose codes were verified by two institution coders (multidisciplinary coding). The coding methods were compared, and differences were translated into revenue and wRVUs using the Medicare Physician Fee Schedule. Comparison between traditional and multidisciplinary coding was performed for three discrete study periods: baseline (period 1), after a coding education session for physicians and coders (period 2), and after a coding education session with implementation of an operative dictation template (period 3). The accuracy of surgeon operative dictations during each study period was also assessed. An external validation at a second academic institution was performed during period 1 to assess and compare coding accuracy.

RESULTS

During period 1, traditional coding resulted in a 4.4% (P = .004) loss in reimbursement and a 5.4% (P = .01) loss in wRVUs compared with multidisciplinary coding. During period 2, no significant difference was found between traditional and multidisciplinary coding in reimbursement (1.3% loss; P = .24) or wRVUs (1.8% loss; P = .20). During period 3, traditional coding yielded a higher overall reimbursement (1.3% gain; P = .26) than multidisciplinary coding. This increase, however, was due to errors by institution coders, with six inappropriately used codes resulting in a higher overall reimbursement that was subsequently corrected. Assessment of physician documentation showed improvement, with decreased documentation errors at each period (11% vs 3.1% vs 0.6%; P = .02). Overall, between period 1 and period 3, multidisciplinary coding resulted in a significant increase in additional reimbursement ($17.63 per procedure; P = .004) and wRVUs (0.50 per procedure; P = .01). External validation at a second academic institution was performed to assess coding accuracy during period 1. Similar to institution 1, traditional coding revealed an 11% loss in reimbursement ($13,178 vs $14,630; P = .007) and a 12% loss in wRVU (293 vs 329; P = .01) compared with multidisciplinary coding.

CONCLUSIONS

Physician involvement in the coding of endovascular procedures leads to improved procedural coding accuracy, increased wRVU assignments, and increased physician reimbursement.

A method to account for variation in congenital heart surgery charges

BACKGROUND

In response to societal pressure to reduce expenditures and increase quality, we sought to develop a methodology to predict hospital charges related to congenital heart surgery.

METHODS

Patients undergoing congenital heart surgery at Boston Children's Hospital in fiscal years 2007 to 2009 comprised the derivation cohort. Clinical data, including Current Procedural Terminology coding of the primary surgical intervention, were collected prospectively and linked to total hospital charges for an episode of care. Surgical charge categories were developed to group surgical procedure types using empiric data and expert consensus. A multivariable model was built using surgical charge categories and additional patient and procedural characteristics to predict the outcome, total hospital charges. A contemporary cohort for fiscal years 2010 to 2012 was used to validate surgical charge categories and the multivariable model.

RESULTS

In the derivation cohort, 2,105 cases met inclusion criteria. One hundred three surgical procedure types were categorized into seven surgical charge categories, yielding a grouper variable with an R(2) explanatory value of 47.3%. Explanatory value increased with consideration of patient age, admission status, and preoperative ventilator dependence (R(2) = 59.4%), as well as weight category, noncardiac abnormality, and genetic syndrome other than trisomy 21 (R(2) = 61.5%). Additional variability in charge was explained when extracorporeal membrane oxygenation utilization and greater than one operating room visit during the episode of care were added (R(2) = 74.3%). The contemporary cohort yielded an R(2) explanatory value of 67.7%.

CONCLUSIONS

The combination of clinical data with resource utilization information resulted in a statistically valid predictive model for total hospital charges in congenital heart surgery.

Development of a charge adjustment model for cardiac catheterization

A methodology that would allow for comparison of charges across institutions has not been developed for catheterization in congenital heart disease. A single institution catheterization database with prospectively collected case characteristics was linked to hospital charges related and limited to an episode of care in the catheterization laboratory for fiscal years 2008-2010. Catheterization charge categories (CCC) were developed to group types of catheterization procedures using a combination of empiric data and expert consensus. A multivariable model with outcome charges was created using CCC and additional patient and procedural characteristics. In 3 fiscal years, 3,839 cases were available for analysis. Forty catheterization procedure types were categorized into 7 CCC yielding a grouper variable with an R (2) explanatory value of 72.6%. In the final CCC, the largest proportion of cases was in CCC 2 (34%), which included diagnostic cases without intervention. Biopsy cases were isolated in CCC 1 (12%), and percutaneous pulmonary valve placement alone made up CCC 7 (2%). The final model included CCC, number of interventions, and cardiac diagnosis (R (2) = 74.2%). Additionally, current financial metrics such as APR-DRG severity of illness and case mix index demonstrated a lack of correlation with CCC. We have developed a catheterization procedure type financial grouper that accounts for the diverse case population encountered in catheterization for congenital heart disease. CCC and our multivariable model could be used to understand financial characteristics of a population at a single point in time, longitudinally, and to compare populations.

The undervaluation of evaluation and management professional services: the lasting impact of current procedural terminology code deficiencies on physician payment

The Resource-Based Relative Value Scale (RBRVS) is fundamentally undermined by the following foundational errors: (1) The full range of office-based evaluation and management (E/M) activities are not captured by the Current Procedural Terminology (CPT) code choices, (2) it places relatively high values on procedural services, (3) there is no measure of intensity for complex outpatient E/M care, and (4) its maintenance and update have been delegated to select professional societies. Limitations imposed on the development of the RBRVS dating back to the early 1980s have not been corrected. The repertoire of codes for physician office-based E/M work must be expanded to create a new topology of choices with new outpatient code families with discrete service code levels, such as comprehensive outpatient consultation care, comprehensive outpatient primary care, and limited outpatient consultation care. Service code relative values must be based on representative samples and reliable survey data, draw from the broader literature on work intensity, and be developed with accountable and representative professional engagement.

Capture of complexity of specialty care in pediatric cardiology by work RVU measures

OBJECTIVE

We sought to determine the relationship between relative value units (RVUs) and intended measures of work in catheterization for congenital heart disease.

METHODS

RVU was determined by matching RVU values to Current Procedural Terminology codes generated for cases performed at a single institution. Differences in median case duration, radiation exposure, adverse events, and RVU values by risk category and cases were assessed. Interventional case types were ranked from lowest to highest median RVU value, and correlations with case duration, radiation dose, and a cases-predicted probability of an adverse event were quantified with the Spearman rank correlation coefficient.

RESULTS

Between January 2008 and December 2010, 3557 of 4011 cases were identified with an RVU and risk category designation, of which 2982 were assigned a case type. Median RVU values, radiation dose, and case duration increased with procedure risk category. Although all diagnostic cases had similar RVU values (median 10), adverse event rates ranged from 6% to 21% by age group (P < .001). Median RVU values ranged from 9 to 54 with the lowest in diagnostic and biopsy cases and increasing with isolated and then multiple interventions. Among interventional cases, no correlation existed between ranked RVU value and case duration, radiation dose, or adverse event probability (P = .13, P = .62, and P = .43, respectively).

CONCLUSIONS

Time, skill, and stress inherent to performing catheterization procedures for congenital heart disease are not captured by measurement of RVU alone.

New Casemix Classification as an Alternative Method for Budget Allocation in Thai Oral Healthcare Service: A Pilot Study

This study aimed to develop a new casemix classification system as an alternative method for the budget allocation of oral healthcare service (OHCS). Initially, the International Statistical of Diseases and Related Health Problem, 10th revision, Thai Modification (ICD-10-TM) related to OHCS was used for developing the software “Grouper”. This model was designed to allow the translation of dental procedures into eight-digit codes. Multiple regression analysis was used to analyze the relationship between the factors used for developing the model and the resource consumption. Furthermore, the coefficient of variance, reduction in variance, and relative weight (RW) were applied to test the validity. The results demonstrated that 1,624 OHCS classifications, according to the diagnoses and the procedures performed, showed high homogeneity within groups and heterogeneity between groups. Moreover, the RW of the OHCS could be used to predict and control the production costs. In conclusion, this new OHCS casemix classification has a potential use in a global decision making.

Comparison of work and time estimates by chiropractic physicians with those of medical and osteopathic providers

BACKGROUND

Resource-based relative value scales (RBRVS) have become a standard method for identifying costs and determining reimbursement for physician services. Development of RBRVS systems and methods are reviewed, and the RBRVS concept of physician "work" is defined.

OBJECTIVE

Results of work and time inputs from chiropractic physicians are compared with those reported by osteopathic and medical specialties. Last, implications for reimbursement of chiropractic fee services are discussed.

METHODS

Total work, intraservice work, and time inputs for clinical vignettes reported by chiropractic, osteopathic, and medical physicians are compared. Data for chiropractic work and time reports were drawn from a national random sample of chiropractors conducted as part of a 1997 workers' compensation chiropractic fee schedule development project. Medical and osteopathic inputs were drawn from RBRVS research conducted at Harvard University under a federal contract reported in 1990. Both data sets used the same or similar clinical vignettes and similar methods. Comparisons of work and time inputs are made for clinical vignettes to assess whether work reported by chiropractors is of similar magnitude and variability as work reported by other specialties.

RESULTS

Chiropractic inputs for vignettes related to evaluation and management services are similar to those reported by medical specialists and osteopathic physicians. The range of variation between chiropractic work input and other specialties is of similar magnitude to that within other specialties. Chiropractors report greater work input for radiologic interpretation and lower work input for manipulation services.

CONCLUSIONS

Chiropractors seem to perform similar total "work" for evaluation and management services as other specialties. No basis exists for excluding chiropractors from using evaluation and management codes for reimbursement purposes on grounds of dissimilar physician time or work estimates. Greater work input by chiropractors in radiology interpretation may be related to a greater importance placed on findings in care planning. Consistently higher reports for osteopathic work input on manipulation are likely attributable to differences in reference vignettes used in the respective populations. Research with a common reference vignette used for manipulation providers is recommended, as is development of a single generic approach to coding for manipulation services.

Validation of relative value scale for congenital heart operations

BACKGROUND

To determine the validity of the newly assigned work relative value unit (RVU) scale for surgical procedures for congenital heart disease, we measured its relationship to length of hospital stay, total hospital charges, and mortality.

METHODS

We identified cases by the presence of ICD-9-CM codes in nine statewide, administrative hospital discharge abstract databases for 1992. Computer algorithms were generated to assign RVUs to individual cases. Spearman correlation coefficients between work and practice expense RVUs and median length of hospital stay, total hospital charges, and in-hospital mortality were determined, as well as parameter estimates from linear and logistic regression.

RESULTS

Using data from 5,192 cases involving 34 surgical procedures for congenital heart disease, higher work RVUs were associated with longer lengths of hospital stay (rs = 0.72, p < 0.0001), higher total hospital charges (rs = 0.81, p < 0.0001), and higher in-hospital mortality (rs = 0.45, p = 0.01). A 5-point increase in the relative value scale was associated with an increase in the length of stay by a multiplicative factor of 1.3 (p < 0.0001); total hospital charges by 1.5 (p < 0.0001); and the odds of in-hospital death by 1.9 (p < 0.0001). Findings were similar for practice expense RVUs, as work and practice expense RVUs were highly correlated (rs = 0.93, p < 0.0001).

CONCLUSIONS

The group of work RVUs for surgical procedures for congenital heart defects are reasonable relative measures, on average, of physician work for these procedures, thus supporting the use of this scale to determine physician reimbursement. Practice expense RVUs may not be an independent measure for these procedures.

Comparison of 1997 Medicare relative value units for gender-specific procedures: is Adam still worth more than Eve?

BACKGROUND

On January 1, 1992, Congress implemented a Medicare payment system based on relative value units (RVUs). The total RVU (which is made up of work, practice, and malpractice RVUs) is multiplied by a dollar conversion factor to set the reimbursement for all procedures covered by Medicare. In a previous study, we found that significant gender bias exists in Medicare reimbursement for female-specific services. Recently, HCFA approved increases (beginning January 1997) in the work RVU for many gynecologic procedures. This study was undertaken to compare work and total RVUs for gender-specific procedures effective January 1, 1997.

METHODS

Using the May 1996 Federal Register, we compared work and total RVUs for 24 pairs of gender-specific procedures. The groups were matched so that the amount of work and level of difficulty would be similar, if not identical. We validated our selection of procedures for comparison by also evaluating the average time required to perform these procedures.

RESULTS

Comparison of work RVUs for the 24 paired procedures revealed that in 19 cases (80%), male-specific procedures had a higher RVU; in 3 cases (12%), female-specific procedures were higher; and in 2 cases, there was no difference. On average, work RVUs were 49% higher for urologic procedures than for gynecologic procedures. Comparison of total RVUs revealed that in 20 cases (83%), urologic procedures had a higher total RVU and in 3 cases (12%), gynecologic procedures were higher. On average, male-specific surgeries are reimbursed at an amount which is 37% higher than that for female-specific surgeries.

CONCLUSION

Recent increases in work RVUs for many gynecologic procedures have resulted in improved reimbursement. However, even with these improvements, significant gender bias still exists in the Medicare reimbursement of female-specific procedures. This gender bias is further magnified as more private insurance carriers use the system to set reimbursement.

Is Adam worth more than Eve? The financial impact of gender bias in the federal reimbursement of gynecological procedures

PURPOSE

On January 1, 1992, Congress implemented a Medicare payment system based on relative value units (RVU). The RVU multiplied by a dollar conversion factor sets the reimbursement for all procedures covered by Medicare and many other private insurers. This study was undertaken to evaluate discrepancies in federal reimbursement for gender-specific procedures.

METHODS

Using the December 1995 Federal Register and the regional Medicare conversion factor ($40.08/RVU), we compared the work RVU and total reimbursement of 24 groups of gender-specific surgical procedures. The groups were matched as carefully as possible so that the amount of work and level of difficulty would be similar, if not identical. Some examples of comparisons are as follows: biopsy of male vs female genitals, hysterectomy vs prostatectomy, staging for ovarian vs testicular cancer, and exenteration for cervical vs prostate cancer.

RESULTS

In the 24 matched procedures, the male-specific procedures were reimbursed at a higher amount in 19 (79%) cases. The female-specific procedures were reimbursed at a higher amount in 3 (12%) cases (P = 0.004). There was no difference in reimbursement for two of the comparisons. Overall, we found that male-specific procedures are reimbursed at an amount which is 44% higher than female-specific procedures. Comparison of work RVU revealed that male-specific procedures were assigned higher values in 19 cases and, overall, male gender-related surgeries had work RVU that were 50% higher than female gender-related surgeries.

CONCLUSION

There is significant gender bias against the Medicare reimbursement of female-specific services. This results in a lower net reimbursement for gynecologic procedures. In addition, since many private sector insurance carriers now use the resource-based relative value scale system, this gender bias is further potentiated.

Use of the resource-based relative value scale for private insurers

Medicare's resource-based relative value scale (RBRVS) was implemented 1 January 1992 for physician payment using a conversion factor of $31 for each relative value unit (RVU). We calculated a conversion factor of $42.24 for The Travelers Insurance Company's group health plan business using the RBRVS methodology and the calendar year 1990 Travelers Large Case Norms Extract of active employees. This DataWatch describes two important applications of the relative value scale for private insurers: for pricing and for analyzing claims expenditures.

The resource-based relative value scale: methods, results and impacts on urology

Increased concern for rising health care costs in the United States has led to the passage of legislation to reform physician payment for Medicare services based on resource inputs. In January 1992 the Health Care Financing Administration began implementing the new law, which replaces the existing Medicare system of physician payment with a fee schedule based on the resource-based relative value scale (RBRVS). We summarize the methods and data used to derive the RBRVS for urology. A national random sample of 115 practicing urologists completed structured telephone surveys to provide ratings of physician time and work required before, during and after most frequently performed urological services. Subsequent survey cycles with urologists provided further refinement. Urologists then participated in a cross-specialty physician panel to link services from all specialties onto a common scale. This common scale was adjusted for geographic differences in practice overhead costs and malpractice insurance premiums. A monetary conversion factor, determined by the Health Care Financing Administration, was then applied to convert the RBRVS into a Medicare fee schedule. The merits and demerits of the scientific process used to develop and maintain the relative value scale are extensive. While statistically valid and reproducible, the study results have been altered in the political arena. The results and impacts of the new Medicare payment system on urology will be significant, although it is not yet clear how urological practice will be affected. Although faring better than most surgical specialties, urologists stand to lose approximately 8% of their Medicare income when the new fee schedule is fully implemented. There will be relative gains for evaluation and management services and losses for most invasive procedures.

The economics of clinical genetics services. IV. Financial impact of outpatient genetic services on an academic institution

Those clinical genetic services that do not involve laboratory tests or procedures--i.e., the "cognitive" services such as diagnosis, management, and counseling--are labor-intensive, time-consuming, and not self-supporting. However, as a result of an evaluation at a genetics clinics, a patient will often receive other services at the same medical center. The full economic impact of the genetics clinic may be underappreciated. Therefore, at one medical center we examined (a) three settings that delivered genetics services and (b) two specialty clinics providing services to children with genetics conditions; and we calculated charges and payments for an unselected, consecutive group of outpatients. The results showed that cognitive genetics services accounted for a variable, but generally low, percentage of both the professional (generally physicians') and total charges accumulated by patients as a consequence of their visit to the genetics clinic. With laboratory and procedural charges included, patients seen in general genetics clinics (or their insurance plans) paid up to three times as much to the medical center and to its health professionals as to the genetics professional. These data confirm that clinical genetics services, while not generating enough income to cover their own costs, bring considerable revenue to the medical center. This fact alone should prove useful to the director of clinical genetics programs when they are negotiating finances with institutional administrators.

Designing fee schedules by formulae, politics, and negotiations

Fee-for-service cannot be used successfully by organized health insurance without a fee schedule. America first tried to pay doctors under Medicare by an involved formula system without a fee schedule, but the effort has failed. The United States has now commissioned a research project to design a unique fee schedule that will precisely reflect physicians' effort and practice costs and that will represent the prices produced by a perfectly competitively market. The primary goal is the same as that pursued recently by reformers in all countries: viz., narrow the spread in fees and income between surgical and cognitive fields. There are serious technical limitations on this effort, despite the talent of the research team. An additional difficulty lies in the nature of the subject: paying the doctor involves conflicts of interest between payers and all doctors as well as among the medical specialties, and the conflicts cannot be resolved by any formulae calculated by any single research team. Methodological and political compromises will be necessary, in order to adopt a reform. The new method may be just as politically driven, complicated, and disputed as the old one, despite America's pretenses that it prefers free markets and opposes excessive government.