WASHINGTON, DC – Ken Stoller, senior counsel of the American Insurance Association (AIA), today testified before the South Carolina Workers’ Compensation Commission in opposition to its proposed Regulation 67-1302 (A). The proposed regulation would permit discontinuation of the use of Medicare’s Resource-Based Relative Value Scale (RBRVS) as the means for determining reimbursements for medical practitioners in the workers’ compensation system.
“AIA strongly opposes discontinuing the use of Medicare’s RBRVS with a single conversion factor applicable to all providers,” said Stoller. “The RBRVS approach is truly ‘resource based,’ setting prices for medical services on the actual costs to the provider of furnishing each service.”
The viability of the RBRVS depends upon maintenance of its internal consistency, which is accomplished by adhering to the relative values assigned by the Centers for Medicare and Medicaid Services (CMS) as a result of objective, scientifically-based analysis that has undergone extensive public discussion and input from the relevant groups of medical providers.
“Fee schedules based on self-reported provider charges are inherently inflationary,” said Stoller. “Providing higher reimbursements to politically favored medical specialties will lead to overutilization and increased costs.”
Research has shown that charge-based fee schedules tend to overvalue high-technology invasive and imaging procedures and undervalue evaluation and management, with the resulting unequal distribution of financial rewards distorting the mix of physician services. Granting a higher relative reimbursement level to a particular specialty (e.g., surgical services) by creating a separate conversion factor would upset the delicate balance achieved by the RBRVS, and lead to overutilization of those services, with negative consequences for injured workers and payers alike. There is evidence that states which unduly incentivize surgical interventions have a greater percentage of lost-time claims than states which adhere to the relative values assigned by CMS.