A local laboratory performs three levels (level I, II, and III) of blood tests A local laboratory performs three levels (level I, II, and III) of blood tests. A relative value unit (RVU) analysis indicates that a level I examination requires 3 RUVs, a level II exam requires 9 RUVs and a level III exam 15 RUVs. The total costs to run the laboratory amount to $200,000 annually and the number of tests administered annually are 1,000 level I tests, 1,700 level II tests and 300 level III tests.

a.Briefly explain the RUV method and the relationship among three levels of test. (3 points)

b.Using RUV, what is the estimated cost per RUV? (3 points)

c. To have a 15% profit, how should the level III test be priced? (3 points)

d.