1992

Medicare begins using William Hsiao’s research-based relative value scale (RERVs) to scientifically determine what each physician service was worth. It led to a new currency termed “Relative value units” (RVUs), based on work/time spent for a visit or intervention; overhead insured in performing the service; cost of training needed to perform the service; and the malpractice expense involved. It was adopted by private insurers as well (Rosenthal, 61). But the scientific objectivity of the scale was turned on its head when Congress assigned annual adjustments to the scale to the AMA, which in turn assigned the updates to the value of codes to a committee (i.e., the Relative Value Scale Update Committee) that met three times yearly and was composed entirely of physicians with vested financial interests in Medicare remuneration to their respective specialties. “Allow the AMA to determine doctors’ payments is akin to letting the American Petroleum Institute decide what BP and Shell and ExxonMobil can charge us not just for gas but, somehow, for wind and solar power as well” (63).