The financial impact of resource-based relative value scale on us-based community health centers.

The introduction of resource-based relative value scale (RBRVS) as a cost accounting methodology for healthcare organizations gained acceptance in the mid- to late-1990s. The literature suggests that healthcare facilities using RBRVS will better understand their financial structure, improve provider productivity, compensate their providers based on profitability of services provided, enter into more profitable contracts with third-party payers, better manage their costs, and ultimately, improve their overall fiscal viability (Berlin and Budzynski, 1998; Capitation Management Report, 1998; Colucci, 1998; Dunevitz, 1998; Miskovic and McCally, 1996; Sides, 2000; Swander, 1998). The current study investigates whether the use of RBRVS has a financial impact on a specific type of healthcare facility: community health centers.

RESOURCE-BASED RELATIVE VALUE SCALE

Resource-Based Relative Value Scale (RBRVS) assigns a value to medical services based on the time and skill level needed to perform these services. Initially, this system was developed for third-party reimbursement. However, its use has expanded to include: evaluation of provider productivity, analysis of third-party contract profitability, establishment of fee schedules, and cost analysis.

Prior to 1992, third party payers paid for medical services based on a principle of "customary, prevailing, and reasonable charge." As the cost of providing healthcare increased, so did the "customary, prevailing, and reasonable charge." The amount paid for similar services varied by geographic region and from clinic to clinic. This was true for private insurers as well as Medicare, a federal health insurance program. Bentzen-Bilkvist (1998) noted that from 1985-1988, Medicare-allowed charges increased at an annual growth rate of 12.3percent, far exceeding the rate of inflation.

The growth in federal expenditures for healthcare led the US Congress to include Section 1848 in the Omnibus Budget Reconciliation Act of 1989. This section required, that by January 1992, the Medicare fee schedule for reimbursing providers of healthcare services "include national uniform relative values for all physicians' services." At the same time, Congress required a uniform coding system to reduce the variations physicians used to code their office, nursing home, and hospital visits (Compilation of Social Security Laws, 2004).

The resulting system consists of Current Procedural Terminology (CPT) codes for each type of medical service provided and the RBRVS. Each CPT code is assigned a relative value based on the resources needed to provide that service. Each year, Medicare sets a conversion factor based on the amount it will pay for one relative value unit (RVU). Medicare takes into consideration variations in costs, due to geographic location, by assigning regions of the country an adjustment amount to the conversion factor using the Geographic Practice Cost Indices (GPCI).

For reimbursement, healthcare providers assign a CPT code to each of the medical services provided during a patient encounter. Medicare reimburses providers by multiplying the RBRVS assigned to each CPT code by the conversion factor and the GPCI. This reimbursement system quickly gained popularity among private insurance carriers and by the late 1990's, three-fourths of them used this methodology for reimbursement of services (Bentzen-Bilkvist 1998).

After its implementation in 1992, professional healthcare management associations, through their journals (e.g., Medical Group Management Journal, Healthcare Financial Management, Group Practice Journal, Health Affairs), recommended the use of RBRVS as a cost accounting tool to: evaluate provider productivity, develop physician compensation policies, analyze third-party payer contracts, develop fee schedules, analyze costs, and benchmark against industry standards. These publications suggested that using RBRVS as a cost accounting tool would provide a better understanding of the structure of services delivered by providers, improve cost management, and ultimately improve the fiscal viability of the organization.

The arrival of managed care and capitation emphasized the importance of a cost accounting system that could provide reliable, detailed information about healthcare delivery costs (Berlin and Faber 1996, Mays and Gordon 1996). "With accurate cost information, physicians and practice managers can assess the financial viability of their managed care arrangements as well as better manage the overall financial and business operations of the practice" (Sides 2000). Conrad, Nagle, and Wunar (1996) add that "practice managers who use cost accounting methodologies as a basis for developing overall cost management processes are often more effective in ensuring practice profitability." The cost accounting method consistently identified is RBRVS.

Healthcare management associations recommend its use to evaluate provider productivity and suggest that this analysis can increase revenues (Dunevitz 1998, Stravrakas 2004, Swander 1998). Stravrakas (2004) told readers to "expect to find areas of lost reimbursement...your group will more accurately charge for services provided and increase revenue." A speaker at a healthcare management presentation told the audience "if in the first six months (of analyzing provider productivity) you don't find $50,000 in lost revenue, I'll eat my hat!" (Swander 1998). Provider productivity is determined monthly by totaling the relative value of ali CPT codes generated by each physician. This total is benchmarked against pre-determined expectations and productivity levels of other physicians within the same specialty area. This benchmarking allows management to identify under-performing physicians and take corrective action. This action may include: CPT coding training to ensure that services are billed out appropriately, changing the appointment scheduling process to allow more patients to be served each day, teaching physicians to work more efficiently to enable them to serve more patients, or replacing non-producing physicians with more productive physicians. These corrective actions are expected to increase provider productivity, more accurately charge for services provided, and ultimately increase revenues.

Another use of RBRVS cost accounting is cost analysis. (Berlin and Faber 1996, Miskowic and McCally 1996, Shackleford 1997). Andrianos and Dykan (1996) reported that one medical facility using RBRVS to analyze its costs saved $2 million (3% of total costs) annually. Cost analysis using RBRVS is performed by categorizing costs into three cost pools: physician salaries, malpractice insurance, and practice expense. The total cost in each cost pool is divided by total RVUs to determine a cost per RVU. This cost per unit of service is used to benchmark against expected costs: both previous periods and industry averages. If costs are not within expected ranges, corrective action can be taken. RBRVS cost analysis can be used in preparation of budgets and evaluating the profitability of managed care contracts (Berlin and Faber 1996, Conrad, Nagle, and Wunar 1996, Miskowic and McCally 1996, Shackleford 1997, Sides 2000). Cost of providing services can be used to revise fee schedules and negotiate reimbursement rates with third party payers (Balen 1999, Berlin 1995, Berlin and Budzynski 1998, Colucci 1998, Dunevitz 1998, Shackelford 1997). Using RBRVS to perform these cost analyses, medical group practices can expect to improve their overall fiscal viability (Conrad, Nagle, and Wunar 1996, Miskowic and McCally 1996, Vonderheid et al. 2004).

COMMUNITY HEALTH CENTERS

US-based community health centers (CHCs) provide healthcare services for people who have barriers to traditional forms of medical care, such as low income and no insurance. These non-profit organizations receive funding for the cost of services through a number of sources. Total receipts in 2002 for all CHCs were $5.2 billion, with 22percent coming from the US government, 55percent from patient services, and 23percent from private granting agencies. Since more than two-thirds of the patients have income at, or below, the federally defined poverty level (1), patient payments comprise only 11percent of ali collections for patient services. Medicaid (63%), Medicare (10%), private insurance (11%), and other public funding (e.g. local communities) (5%) make up the balance of collections for patient services (Bureau of Primary Health Care 2003).

The number of patients served by CHCs grew from 11.3 million in 2002 to 15 million in 2003 (NACHC Press Release 2004). According to the National Association of Community Health Centers (NACHC), CHCs provide healthcare at a cost of "about 10 times less than average per capita spending on personal health care" and that "the quality of care provided at health centers is equal to or greater than the quality of care provided elsewhere" (About Health Centers, 2005).

Although CHCs believe that they are providing quality services to their patients in a cost-effective manner, an overwhelming majority (91%) reported that they lack sufficient funds to adequately provide the range of services their patients need (REACH 2000). McAleamey (2002) found that among CHCs operating between 1996 and 1999, one in five reported a 25percent overall increase in the share of uninsured clients and one in five CHCs experienced a 25percent drop in Medicaid users. This change in patient-mix means fewer dollars received for services. Since most uninsured patients are near the federal poverty levels, these patients receive large discounts based on ability to pay and CHCs are reimbursed for only a small portion of the cost to provide these services. However, CHCs receive full-cost reimbursement for Medicaid users. The increase in patient numbers and shift in payer-mix result in increased costs without a corresponding increase in revenue. McAleamey concluded that many CHCs are on the brink of financial insolvency.

The National Health Center Practice Improvement Initiative (NHCPII) was established in 1999 to address the financial problems of CHCs. (2) NHCPII concluded that CHCs should use the RBRVS cost accounting system. As a result, the Bureau of Primary Health Care (BPHC) provided funding for: assisting CHCs in the implementation of RBRVS and training sessions in its use. In a letter to CHCs describing NHCPII, BPHC said "this is a critical capacity-enhancement program for centers to ensure their survival and growth in today's dynamic health care marketplace" (NHCPII 1999). The letter went on to tell CHCs that they could use RBRVS to "compute relative value units for their practices, analyze information to improve their practices, and create confidential benchmark reports comparing individual center performance to that of other centers and a broader ambulatory health care database" (NHCPII 1999). According to a website describing the initiative, participating CHCs will benefit by "understanding their financial structure and the structure of services delivered by providers; analyzing their operations using standardized units of measurement, examining costs down to the procedure code level by provider; receiving internal and external benchmarks, as well as comparisons against national and regional data; and allowing CHCs to look at provider productivity based on work relative value units (RVUs)" (NHCPII 1999 website). As a result of this initiative, many CHCs across the nation implemented RBRVS.

RESEARCH QUESTION

In the mid-1990s, professional healthcare management associations began touting the benefits of using RBRVS as a cost accounting tool. These associations continue to recommend the use of RBRVS; a recent seminar on "Maximizing Profitability Through Cost Management and Revenue Enhancement" included a session on using RBRVS (Medical Group Management Association 2005). Healthcare organizations are told that they can increase revenues, cut costs, and increase profits by using RBRVS. The perceived benefits led NHCPII to urge CHCs to use the RBRVS cost accounting system to improve their financial viability and ensure their survival.

Although its use is strongly recommended, the authors found no study that examined the financial impact of implementing RBRVS. This study investigates whether the use of RBRVS provides financial benefit to CHCs. After identifying CHCs that have implemented RBRVS, the authors examine the impact of its use by comparing financial indicators of the CHCs before and after implementation.

DATA COLLECTION AND ANALYSIS

To identify which CHCs were using RBRVS, the authors sent a questionnaire to the Finance Directors of all 633 CHCs listed on the Bureau of Primary Health Cafe's website in 2002. The Finance Directors were asked if they use RBRVS, and if so, when they started its use, and in what manner they use it. If CHCs were not using RBRVS, the Finance Directors were asked to identify if they had any future plans with regard to implementing RBRVS. Respondents were then contacted for permission to access selected data from the Uniform Data Set (UDS), an annual report filed with the Bureau of Primary Health Care.

HRSA provided financial and demographic data for the eight years that UDS reports were filed (1996 through 2003) for each participating CHC. The financial data included: costs by function, gross revenues by source, adjustments to patient service revenue, and cash collections for patient services. The demographic data included: number of patient visits, types of services provided, and patient demographics. To ensure that the participants were representative of the entire population, we compared the demographic data of participating CHCs with that of all CHCs. We compared size as defined by number of patient visits, types of services provided, geographic location, urban and rural settings, and percent of patients with specific demographics: below the poverty level, racial and ethnic minorities, gender, and age group.

To test the research question, the authors completed a paired t-test to determine whether any significant differences existed in the financial indicators from before and after implementing RBRVS. The authors followed the recommendations of McAleamey (2002) and Pavlock (1998) and compared the following financial indicators per patient encounter and per full-time-equivalent (FTE) provider: total revenue, gross patient revenue, net patient revenue, grants, costs, and net income. Using per patient encounter and per FTE provider eliminated variations due to the size of CHCs. "Before" is defined as the average from 1996 to the year before implementing RBRVS and "after" as the average from the year after implementation through 2003. Any benefits of using RBRVS were not expected until after RBRVS was fully implemented, so the year of implementation was excluded.

RESULTS

Of the 633 questionnaires mailed, 236 completed forms (37% response rate) were returned. Results indicated that 115 (49%) of the responding CHCs use RBRVS for some type of analysis. The most commonly reported uses were evaluating provider productivity (88%) and analyzing costs (63%). CHCs also reported using RBRVS to analyze third-party contracts (18%) and to set fee schedules (12%). Of the CHCs using RBRVS, 77percent implemented it after NHCPII's began providing implementation support and training (See Exhibit 1, Panel A). Two-thirds of the respondents using RBRVS to evaluate provider productivity reported performing the analysis monthly. Most contract analysis was performed either annually (47%) or as a non-routine analysis (35%). Those CHCs using RBRVS information to set their fee schedules completed this task annually. The frequency of performing cost analysis varied from monthly (11%), to quarterly (15%), to annually (50%) (See Exhibit, Panel B).

When asked if the results of the analysis were worth the effort, a majority of the respondents said "yes" or "mostly" for all uses. Of those that stopped using RBRVS for any type of analysis, the most common reason cited was that the information took too much time to generate (See Exhibit 1, Panel C).

Of the CHCs that had never used RBRVS for provider productivity, nearly one-half (46%) planned to implement it in the coming year or were considering its use. Available resources appeared to be a limiting factor in the use of RBRVS; 27percent of non-users stated that they wanted to use RBRVS but did not have the resources (See Exhibit 1, Panel D).

Several respondents provided additional comments regarding the use of RBRVS. Most of them observed changes in how they viewed productivity and fee schedules. One respondent indicated that RBRVS reports helped the Board of Directors look beyond how many patients were seen and provided a better understanding of CHC services. One Finance Director noted the difficulty of achieving management compliance in using RBRVS "when we have cost reimbursement contracts." Another noted that using RBRVS for contract negotiations was not feasible since there are only two private third-party payers in his region and that these payers are not willing to pay the cost of providing services at CHCs.

Exhibit 2 identifies the level of support for using RBRVS. Since top management support is critical to successful implementation of initiatives, respondents were asked how supportive their Executive Director was of using RBRVS. Seventy-six percent of the Finance Directors indicated that their Executive Director was "very" or "somewhat" supportive (See Exhibit 2, Panel A). Although a majority (68%) of the Finance Directors has assistance with accounting duties, ranging from less than one FTE (full time equivalent) to 11 FTEs, 49 percent reported assistance equal to one FTE or less (See Exhibit 2, Panel B).

Of the 236 respondents, 43 CHCs granted permission to obtain their financial data, of which 23 used RBRVS. The 43 participating CHCs appear to be representative of the overall CHC population having the same mix of urban to rural CHCs, percentage of patients below the federally defined poverty level, percentage of patients included in racial and ethnic minority classification, and geographical distribution throughout the US.

The results of the paired t-tests are presented in Exhibit 3. As indicated, there were no significant differences in the means of any of the financial indicators before and after implementing RBRVS.

DISCUSSION

The literature encourages healthcare organizations to use RBRVS with the expectation that more information about their financial structure, provider productivity, and costs will lead to improvements in their fiscal viability. When the 1999 National Health Center Practice Improvement Initiative provided financial support to struggling community health centers to implement RBRVS, its stated goal was to "ensure their survival and growth in today's dynamic health care marketplace" (NHCPII 1999). This study investigated whether CHCs financial performance was impacted by the use of RBRVS.

Nearly one-half of responding CHCs routinely use RBRVS and nearly one-half of CHCs not currently using RBRVS indicate that they are considering its use. In addition, a majority of responding Finance Directors reported that top management supported the use of RBRVS. Responses from the CHCs indicated a perceived benefit from using RBRVS and that the information obtained from the analysis was worth the effort. For example, in looking at cost per encounter before and after implementation, it would appear that there is a benefit from using RBRVS. However, the results of our analysis indicated that there were no significant changes in the tested financial indicators after implementing RBRVS. This raises the question of why CHCs are so strongly in favor of its use. Further study is warranted to investigate the possible non-financial benefits from using RBRVS.

The current study focused on non-profit CHCs. These mission driven organizations focus on providing services. Although they must utilize resources carefully to provide services to the greatest number of people, their focus is not on making a profit. Further study is needed to determine whether similar results would be found in for-profit clinics.

Acknowledgement: We thank the following for their insight and helpful comments: Nicole Touchet, MD, Arthur Allen and other participants of the isRHFM Symposium, and reviewers of an earlier version of the paper.

REFERENCES

About Health Centers. (2005). National Association of Community Health Centers. www.nachc.com/about/aboutcenters.asp. (Accessed Feb. 18).

Andrianos, J., & Dykan, M. (1996). Using cost accounting data to improve clinical value. Healthcare Financial Management, (May).

Balen, B. (1999). Tracking charges and expenses through RBRVS units: A case study. American College of Medical Practice Executives Paper, (Sep.).

Bentzen-Bilkvist, K. (1998). The evolution of evaluation and management coding. College Review, (Fall): 5-39

Berlin, M. (1995). Using cost accounting in a medical group practice: An application using the resource-based relative value scale. Medical Group Management Journal, (May).

Berlin, M., & Budzynski, M. (1998). Budget variance analysis using RVUs. Medical Group Management Journal, (Nov./Dec.): 50-52.

Berlin, M., & Faber, B. (1996). Financial applications using the cost per RBRVS methodology. Medical Group Management Journal, (Nov./Dec.): 28-34.

Bureau of Primary Health Care. (2003). The Uniform Data System--CY2002, http://bphc.hrsa.gov/uds/data.htm. (Accessed Jul. 1).

Capitation Management Report. (1998). RVU Costing Model Takes Guesswork Out of Capitation, (Apr.): 49-54.

Colucci, C. (1998). Implement the medical group revenue function. Medical Group Management Journal, (Jul./Aug.): 32-47.

Compilation of Social Security Laws. (2004). Payment for Physician Services. www.ssa.gov/op_home/ssact/title18/1848.htm (Accessed May 20, 2004).

Conrad, K., Nagle, C., & Wunar, R. (1996). Cost accounting helps ensure group practice profitability. Healthcare Financial Management, (Nov.).

Dunevitz, B. (1998). Electronic or manual RVU costing achieve business objectives. Medical Group Management Update, (May 15).

Mays, J., & Gordon, G. (1996). Developing a cost accounting system for a physician group practice. Healthcare Financial Management, (Oct.).

McAleamey, J. (2002). The financial performance of community health centers, 1996-1999. Health Affairs, (Mar./Apr.): 219-225.

Medical Group Management Association. (2005). Maximizing Profitability Through Cost Management and Revenue Enhancement, Denver, CO, (Aug.): 29-30.

Miskowic, A., & McCally, J. (1996). Using RVUs and RBRVS to improve practice management and bottom line revenues. Group Practice Journal, (Jan./Feb.).

NACHC. (2004). FY 2005 Budget Includes Increase for Community Health Centers--Health Centers say Funding Increase Will Help Keep Pace with Growing Patient Population, (Press Release, Feb. 2). www.nachc.com/press/fy2005budget.asp. (Accessed May 24, 2004).

National Health Center Practice Improvement Initiative. (2002). www.mgma.com/research/nhcpractice.ctm. (Accessed Jun. 23).

National Health Center Practice Improvement Initiative, Program Assistant Letter 99-17, (1999, May 18). ftp://ftp.hrsa.gov/bphc/docs/1999pals/pal99-17.txt. (Accessed May 24, 2004).

Pavlock, E. (1998). Financial Management for Medical Groups, Center for Research in Ambulatory Health Care Administration. Englewood, CO: Center for Research in Ambulatory Health Care Administration.

REACH. (2000). Survey of Community Health Centers, National Association of Community Health Centers, www.nachc.com/advocacy/reach1.asp. (Accessed Jun. 12, 2002).

Shackelford, J. (1997). RBRVS cost accounting for the small practice. College Review, (Fall): 23-46.

Sides, R. (2000). Cost analysis helps evaluate contract profitability. Healthcare Financial Management, (Feb.): 63-66.

Stavrakas, L. (2004). Revive your fee schedule with an RVU update. Medical Group Management Association Quick Tip, (Jan.).

Swander, H. (1998). RVU-to-visit ratios can reveal productivity trends. Medical Group Management Update, (Jun. 1): 1,5.

US Department of Health and Human Services. (2005). The 2005 HHS Poverty Guidelines, http://aspe.hhs.gov/poverty/05poverty.shtml. (Accessed May 2005).

Vonderheid, S., Pohl, J., Schafer, P., Forrest, K., Poole, M., Barkauskas, V., & Mackey, T. (2004). Using FTE and RVU performance measures to assess financial viability of academic nurse-managed centers, Nursing Economics, (May-Jun.): 124-134.

Donna K. Dietz

North Dakota State University 

Barbara J. Eide

University of Wisconsin--La Crosse

Address for correspondence: Donna K. Dietz, North Dakota State University, 403G Minard, Fargo, ND 58105 USA, [e-mail].

(1) The 2005 federal guidelines define poverty level as $15,260 for a family of four. The amount varies by family size and living in Hawaii and Alaska (US Department of HHS, 2005).

(2) NHCPII is a collaboration of NACHC, the US Health Resources and Services Administration (HRSA), the Bureau of Primary Health Care (a department within HRSA), all 50 of the state-level primary care associations, and Medical Group Management Association's (MGMA) Center for Research.

EXHIBIT 1

SUMMARY OF RESPONSES TO QUESTIONNAIRE

Panel A--Number of CHCs Using RBRVS

Year Started               Provider     Third-Party     Cost
Using RBRVS              Productivity    Contract     Analysis

2003                          13             4           13
2002                          23             3           8
2001                          15             3           17
2000                          22             3           10
1999                          5              2           10
Before 1999                   23             6           14
Not reported                  --            --           --
Total Started                101            21           72
Stopped Using                 15             4           10
Current Users                 86            17           62
% of Respondents Using       36%            7%          26%
% of Current Users           88%           1181%        63%

                            Other Category
Year Started
Using RBRVS              Set Fee Sched.   Other

2003                           1           --
2002                           3            1
2001                           4            1
2000                           1           --
1999                           3            1
Before 1999                    2           --
Not reported                   --           3
Total Started                  14           6
Stopped Using                  --           2
Current Users                  14           4
% of Respondents Using         6%          1%
% of Current Users            12%          5%

Panel B-Frequency of Use of RBRVS By CHCs

                 Provider         Third-Party    Cost
                 Productivity:    Contract:      Analysis:
                 Users            Users          Users
Frequency of
Using RBRVS      No.     %        No.     %      No.     %

Monthly           58    67%                       7    11%
Quarterly          9    11%        1     6%       9    15%
Semi-annually      2     2%                       2     3%
Annually           7     8%        8    47%      31    50%
Non-routine                        6    35%       3     5%
No response       10    12%        2    12%      10    16%
Total             86   100%       17   100%      62   100%

                 Other:Users
Frequency of
Using RBRVS      No.     %

Monthly            3    16%
Quarterly          1     6%
Semi-annually
Annually           8    44%
Non-routine        1     6%
No response        5    28%
Total             18   100%

Panel B-Frequency of Use of RBRVS By CHCs

                             Provider      Third-Party
                           Productivity:    Contract:
                              No. (%)        No. (%)

FOR CHCS CURRENTLY USING RBRVS:
  Are the results of the analysis worth the effort?

No
Somewhat                     14 (16%)        6 (35%)
Mostly                       16 (19%)        3 (18%)
Yes                          50 (58%)        6 (35%)
No response                   6 (7%)         2 (12%)
Total                        86 (100%)      17 (100%)

FOR CHCS STOPPING THE USE OF RBRVS:
  Why did you stop?

Information not useful        3 (20%)        1 (25%)
Information useful but        7 (47%)        3 (75%)
  took too much time to
  generate
Other                         5 (33%)
Total                        15 (100%)      4 (100%)

                             Cost
                           Analysis:      Other
                            No. (%)      No. (%)

FOR CHCS CURRENTLY USING RBRVS:
  Are the results of the analysis worth the effort?

No                          1 (2%)
Somewhat                   10 (16%)      1 (5%)
Mostly                     17 (27%)      3 (17%)
Yes                        30 (48%)     10 (56%)
No response                 4 (7%)       4 (22%)
Total                      62 (100%)    18 (100%)

FOR CHCS STOPPING THE USE OF RBRVS:
  Why did you stop?

Information not useful      4 (40%)      1 (50%)
Information useful but      5 (50%)      1 (50%)
  took too much time to
  generate
Other                       1 (10%)
Total                      10 (100%)    2 (100%)

Panel D-Plans of CHCs That Have Never Used RBRVS

                                    Provider     Third-Party
                                  Productivity    Contract
                                    No. (%)        No. (%)

Plan to use in coming year          28 (21%)      14 (6%)
Considering using                   34 (25%)      27 (13%)
Want to use, but don't have the     36 (27%)      34 (16%)
  resources
No plans to use                     14 (10%)      23 (11%)
No response                         23 (17%)     117 (54%)
Total never used                   135 (100%)    215 (100%)

                                      Cost
                                    Analysis        Other
                                    No. (%)        No. (%)

Plan to use in coming year          23 (14%)       12 (5%)
Considering using                   33 (20%)       19 (9%)
Want to use, but don't have the     35 (21%)       25 (12%)
  resources
No plans to use                     18 (11%)       20 (9%)
No response                         55 (34%)      140 (65%)
Total never used                   164 (100%)    216 (100%)

EXHIBIT 2
LEVEL OF SUPPORT

Panel A--Level of Support for Use of RBRVS of Top Management of
CHCs

Level                          No.

Very supportive                123 (56%)
Somewhat supportive             46 (20%)
Neutral                         43 (18%)
Somewhat against                 3 (1%)
Very against                     2 (1%)
No response                     10 (4%)
Total                          236 (100%)

Panel B-FTEs of Staff to Assist Finance Director With Accounting Duties

FIEs                           No. (%)

Less that 1.0                  44 (19%)
1.00                           70 (30%)
l .l to 2.0                    19 (8%
2.1 to 3.0                     12 (5%)
3.1 to 4.0                     10 (4%)
More than 4.0                   5 (2%
No assistance or no response   76 (32%)
Total                          236 (100%)

EXHIBIT 3
PAIRED T-TESTS RESULTS COMPARING MEANS OF FINANCIAL INDICATORS
BEFORE AND AFTER IMPLEMENTATION OF CHCS USING RBRVS

                                         "Before"   "After"
Financial Indicator                         Mean       Mean    p-Value

Costs per Encounter                          $153       $105   0.1509
Costs per FTE                            $594,466   $420,189   0.1255
Grant Revenue per Encounter                   $41        $43   0.8064
Gross Patient Revenue per Encounter          $143       $102   0.3045
Gross Patient Revenue per FTE Provider   $555,476   $411,432   0.2452
Net Income per Encounter                       $9         $7   0.7412
Net Income per FTE Provider               $25,144    $32,406   0.6601
Net Patient Revenue per Encounter             $96        $67   0.2459
Net Patient Revenue per FTE Provider     $367,557   $274,183   0.2559
Total Revenue per Encounter                  $162       $113   0.1939