What is a relative value schedule in insurance?

A relative value schedule in insurance is a tool used to determine the reimbursement rates for various medical services and procedures based on their relative complexity and resource use. It assigns a specific value to each service, which is then multiplied by a conversion factor to establish the payment amount. This schedule helps insurance companies standardize payments and ensure consistency in the reimbursement process across different providers and services. It is commonly used in health insurance and workers' compensation programs.