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A first year medical student is preparin a report on health care financing. The resource-based relative value scale(RBRVS) is been use to reimburse
health care providers. Which of the following is a characteristic of the RBRVS system?

A- Cognitive services received a decrease in payments

B-Medicare payments are not based on the RBRVS system

C-It accounts for office overhead costs

D- Surgical fees did not change

E- fees will not be adjusted ferquently despite changes in technology and procedures


Ans: C

Here is some further explanation:

In 1992, Medicare significantly changed the way it pays for physicians’ services. Instead of basing payments on charges, the federal government established a standardized physician payment schedule based on a resource-based relative value scale (RBRVS).

In the RBRVS system, payments for services are determined by the resource costs needed to provide them. The cost of providing each service is divided into three components: physician work, practice expense and professional liability insurance. Payments are calculated by multiplying the combined costs of a service by a conversion factor (a monetary amount that is determined by the Centers for Medicare and Medicaid Services). Payments are also adjusted for geographical differences in resource costs.


What's that???????? :shock:
Do we have to know this kind of stuff? where did u read that? is this a BS q or what......


yeah bela wats this?
I never came across any ques of this kind........
r u sure this is step 1 stuff?


I think the answer is C but I am not 100% sure. Would they ask us such stuff? Probably b/c it has to do w/MEDICARE.
Basically they'd just want us to know what is Medicare/Medicaid; who benefits from them; what is Part A and B and what is covered by each.

Where did I get the above info? From the oficial site for RBRVS system. Just research it in google.


Your answer is correct.

Answer C.

This question come from Exammaster, version 5

I don't know if it will be on the test for step 1, but in section of general principel of exammaster I got this question.
What I only know is this, correct me if I am wrong.

In the Hospital
patient over 65 y/o will be medicare
medicare could be part A and part B.

part A the patient will be admitted to the hospital.

part B the patient will come to the hospital for Lab.
work or X rays, he will not be admitted.

Medicaid patient do not have money. Everything will be pay by the govermant.

In Nursing Home
almost all the patients are Medicaid, or private Insurance.

Pt. over 65 y/o on medicaid.If the patient is going to the hospital and get admitted more than 3 days he will back to the nursing home as medicare part A for 90 days, They said Nursing skill what really is goverment pay more for this people , like they can get PT, OT, ST ,and after that Pt will be back to medicaid part B.If the patient is not admited and get back to the nursing home, he will be on same medicaid part B.

I really don't know if we have to know this, that's why I posted, to see if some one have got a question like this.


The general idea is that U.S health expenditures are huge and it is important to find a way to reduce them or at least keep them stable. As mentioned above, there are three components of the price of a medical service: physician work, practice expenses and professional liability insurance. Practice expenses and overheads costs are the same thing and consist of costs associated with filling forms, medical record-keeping, maintenance of office spaces expenses etc. These cost are increasing, so RBRVS is trying to keep them low. Federal (Medicare) and State (Medicaid) payers are allowed to set reimbursement/payment norms with the participant health care providers. Another method of cost control is DRGs or diagnostic-related groups in which the reimbursement of the hospital health care services is based on the cost of care for an disease, not the medical services that are performed.

This question seems too difficult to me. I would rather focus on eligibility criteria for Medicare and Medicaid, maybe 2-3 major things about COBRA and HIPAA, the differences between fee-for-service and managed care (capitation), types of managed care (HMO, PPO, POS organizations), and more on medical ethics.

Edited by claudia_i on Jul 05, 2005 - 8:09 AM


You're right. Medicare Part A pays for inpatient hospital costs, home health care, hospice care, and for the first 90 days of nursing home care. Medicare Part B pays for dialysis, laboratory tests, outpatient hospital care, and medical devices. People eligible for Medicare are those over 65 y/o and people of any age with chronic disabilities and end-stage renal disease.

Medicaid covers indigent people and basically pays for everything.

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