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.