Impact of Resource-Based Practice Expenses on the Medicare Physician Volume

In 1999, Medicare implemented a resource-based relative value unit (RVU) system for physician practice expense payments, and increased the number of services for which practice expense payments differ by site. Using 1998-2004 data, we examined RVU growth and decomposed that growth into resource-based RVUs, site of service, and service quantity and mix. We found that the number services with site of service differentials doubled, and that shifts in site of service and introduction of resource-based practice expenses (RBPE) were important sources of change in practice expense RVU volume. Service quantity and mix remained the largest source of growth in total RVU volume.