Using Medicare RBRVS for reimbursing out-of-network claims in commercial insurance

Many health plans allow members to receive covered services from providers who are not part of the plan’s contracted network. However, a plan will often limit the amount it pays to a specific percentage of an amount called “usual, customary, and reasonable” (UCR). Historically, the UCR amounts have been determined by reference to commercially available schedules representing prevailing physician charges by type of service and geographic region. Some plans have recently replaced the use of such schedules with Medicare’s resource-based relative value scale (RBRVS) schedule.

The differences in reimbursement levels between fee schedules based on Medicare’s RBRVS and benchmark data based on prevailing charges have led to some unexpected results for both members and physicians. These unexpected results still exist even if the change is designed to produce similar levels of aggregate reimbursement under both methods.