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CMS-1403-FC 27
WAMP Widely available market price
I. Background
Since January 1, 1992, Medicare has paid for
physicians' services under section 1848 of the Social
Security Act (the Act), "Payment for Physicians' Services."
The Act requires that payments under the physician fee
schedule (PFS) be based on national uniform relative value
units (RVUs) based on the relative resources used in
furnishing a service. Section 1848(c) of the Act requires
that national RVUs be established for physician work,
practice expense (PE), and malpractice expense. Before the
establishment of the resource-based relative value system,
Medicare payment for physicians’ services was based on
reasonable charges.
A. Development of the Relative Value System
1. Work RVUs
The concepts and methodology underlying the PFS were
enacted as part of the Omnibus Budget Reconciliation Act
(OBRA) of 1989 (Pub. L. 101-239), and OBRA 1990,
(Pub. L. 101-508). The final rule, published on
November 25, 1991 (56 FR 59502), set forth the fee schedule
for payment for physicians’ services beginning
January 1, 1992. Initially, only the physician work RVUs