Briefly, the ICD-9 is based on the work of a nineteenth-century French
physician. Originally designed to standardize mortality records, the
ICD is now used by hospitals and insurance carriers to code symptoms,
diagnoses, and procedures. The International Classification of
Diseases (ICD) is maintained by the World Health Organization and
revised every ten years. As described below, a version of the ICD
adapted for coding patient encounters in American hospitals - called
the ICD-CM - is maintained and revised annually by the U.S. Department
of Health and Human Services.
ICD-9-CM codes are not frequently used in conjunction with CPT
procedure codes (except for ICD diagnosis codes). Insurance carriers
and hospitals prefer the more exact ICD-9-CM procedure codes for
coding inpatient stays while CPT procedure codes are preferred for
outpatient and office visits. However, ICD-9-CM diagnosis codes are
expected on outpatient bills with CPT procedure codes.
For more details on the ICD, see the information (below) excerpted
from Basic ICD-9-CM Coding (2003) by Lou Ann Schraffenberger, MBA,
Briefly, the RBRVS was developed by the Centers for Medicare and
Medicaid Services (CMS) (formerly known as the Health Care Financing
Administration or HCFA) in cooperation with the Harvard University
School of Public Health. The RBRVS was introduced by CMS in 1992,
implemented in phases over 8 years. The RBRVS is maintained and
revised annually by CMS with input from the American Medical
Association and national medical specialty societies. As described
below, insurance carriers may use Medicare?s relative value units
(RVUs) with a different conversion factor to create physician fee
The RBRVS incorporates CPT procedure codes. In essence, the RBRVS
attaches a relative value to a CPT code. Medicare payments to
physicians are based on the relative value for that CPT code,
multiplied by a given dollar amount (a ?conversion factor.?)
For more details on the RBRVS, see the information (immediately below)
excerpted from the AMA?s Medicare RBRVS: The Physician?s Guide (2004).
More on the RBRVS
In the Consolidated Omnibus Budget Reconciliation Act of 1985,
Congress mandated that the secretary of Health and Human Services
develop a resource-based relative value scale (RBRVS) for Medicare
payments to physicians.
The major elements of Medicare?s present resource-based relative value
scale (RBRVS) are the relative value scale (RVS), the conversion
factor, and the geographic adjustments.
An RVS is a list of physician services ranked according to value. The
California Medical Association developed the first RVS in 1956 and
updated it regularly until 1974. Beginning in 1969, the California
RVS was based on median charges reported by California Blue Shield.
Medicare?s relative value scale (RVS) assigns a total relative value
unit (Total RVU) to each service or procedure represented by a CPT
code. For example, the Total RVU for CPT code 63017 (laminectomy) is
28.53 while the Total RVU for CPT code 29530 (strapping of knee) is
The total relative value unit (Total RVU), in turn, consists of three
components: a relative value for physician-work, a relative value for
practice expense, and a relative value for malpractice risk. For CPT
code 29530 (strapping of knee), for example, the physician work RVU is
.57, the practice expense RVU .41, and malpractice risk .05
According to the AMA, the greatest challenge in developing an
RBRVS-based payment schedule was overcoming the lack of any available
method or data for assigning specific values to physicians? work.
The Harvard University School of Public Health, in cooperation with
CMS, conducted the study that led to the initial relative work values.
The core of the study was a nationwide survey of physicians to
determine the work involved in each of about 800 services. About 4300
relative value estimates of the nearly 6000 services included in the
1992 Medicare relative value scale (RVS) were based directly on
findings from the Harvard RBRVS study.
Values for new and revised procedures in the CPT are included in the
updated relative value scale each year. To develop recommendations
for CMS regarding values to be assigned to these new and revised
codes, the AMA works with national medical specialty societies.
Beginning in January 1999, Medicare began a transition to
resource-based practice expense relative values which established
practice expense for each CPT code that differ based on the place of
In January 2000, CMS implemented the resource-based professional
liability insurance (PLI) relative value units (RVUs).
The physician work component now accounts for an average of 52% of the
total relative value for a service while practice expense accounts for
44% and PLI, 4% (as in the example of CPT code 29530 above).
All three components of the relative value for a service - physician
work relative value units (RVUs), practice expense RVUs, and
professional liability insurance RVUs - are factored by a
corresponding adjustment for the locality.
Geographic adjustments to Medicare payment amounts with the RBRVS were
introduced in 1995. Such geographic adjustments were not part of the
original RBRVS mandated by the 1985 legislation. These geographic
practice cost indices, or GPCIs (pronounced ?gypsies?), were developed
by private researchers including the Urban Institute with funding from
The general formula for calculating Medicare payment amounts with the
RBRVS is expressed as:
Total RVU = (work RVU x work GPCI) + (practice expense RVU x practice
expense GPCI) + (malpractice RVU x malpractice GPCI)
Payment = Total RVU x Conversion Factor
The Medicare RBRVS conversion factor - about $40 in 2004 - completes
the payment calculation. Thus, Medicare?s payment for CPT code 29530
(strapping of knee) with its Total RVU of 1.03 is approximately $40
depending on geographical adjustments. As described above, insurance
carriers may use Medicare?s relative value units (RVUs) with a
different conversion factor to create physician fee schedules.
See the AMA?s Medicare RBRVS: The Physician?s Guide (2004).
More on the ICD
Hospitals and other providers code health care data with the
classification system known as the ICD-9-CM. The International
Classification of Diseases, 9th Revision, Clinical Modification
(ICD-9-CM). The ICD-9-CM is published by the U.S. Department of
Health and Human Services.
A French physician, Jacques Bertillon, introduced the Bertillon
Classification of Causes of Death in 1893 at the International
Statistical Institute in Chicago. Several countries adopted Dr.
Bertillon?s system - including the U.S., Canada, and Mexico. The
American Public Health Association (APHA) recommended revising the
system every decade to keep pace with medical advances. As a result,
the first international conference to revise the International
Classification of Causes of Death convened in 1900.
As the present title of the volume suggests, the ICD has been revised
nine times. The sixth revision of the classification scheme expanded
the system considerably and changed the title to reflect these
changes: Manual of International Statistical Classification of
Diseases, Injuries, and Causes of Death (ICD).
Prior to this sixth revision, responsibility for ICD revisions fell to
the ?Mixed Commission? - a group of representatives from the
International Statistical institute and the Health organization of the
League of nations. In 1948, the WHO (World Health Organization)
assumed responsibility for developing and publishing revisions of the
ICD. WHO sponsored the seventh revision in 1957.
In 1959, the U.S. Public Health Service published the ICDA:
International Classification of Diseases, Adapted for Indexing of
Hospital Records and Operation Classifications. This volume answered
the need for a classification system of operative and diagnostic
WHO published the ninth revision of the ICD in 1978. Again, the U.S.
Public Health Service adapted the ICD-9 for American hospitals and
called it International Classification of Diseases, Ninth Revision,
Clinical Modification (ICD-9-CM).
A tenth revision of ICD, titled International Statistical
Classification of Diseases and Related Health problems, has been
developed. A new feature of the ICD-10-CM is a chapter on identifying
In January 1999, the U.S. began using ICD-10 to code and classify
mortality data from death certificates. The clinical modification
version of ICD-10, which will replace ICD-9-CM, is still under
development by the NCHS (National Center for Health Statistics). By
the end of 2000, final changes were being made and testing plans were
being developed by several entities, including the Centers for
Medicare and Medicaid Services (CMS) and the American Hospital
CMS is also in the process of developing a new procedure
classification system called the ICD-10-CM Procedure Coding System
(ICD-10-CM-PCS). In November 2000, an updated version of ICD-10-PCS
was placed on the CMS homepage. CMS has begun to evaluate the
ICD-10-PCS for implementation. No implementation dates have been set
for either ICD-10-CM (diagnosis) or ICD-10-PCS (procedure)
See Basic ICD-9-CM Coding (2003) by Lou Ann Schraffenberger, MBA, RHIA
Print resources used:
American Medical Association, "Medicare RBRVS: The Physician?s Guide"
(2004) ISBN: 1579474578
Schraffenberger, Lou Ann, "Basic ICD-9-CM Coding" (2003) ISBN: 1584261056
For additional information:
"Center for Disease Control and Prevention"
"Centers for Medicare & Medicaid Services"
"American Medical Association"
"American Medical Association"
In addition to the answer that I have provided, take a look at the two
websites provided by Cynthia-ga in the Comments section.
I hope this helps. Please let me know if you need clarification on
any part of my answer.