Clinical Quick Reference Monthly / September 2024 / The 411 On "RVUs"
WHAT IS THE RVU & WHY SHOULD YOU CARE?
Relative value units (RVUs) serve as the foundation of the Resource-Based Relative Value Scale (RBRVS), a method utilized by Medicare & Medicaid Services (CMS) and other private insurers for calculating physician reimbursement.
What Is An RVU?
RVUs are the fundamental unit that the Centers for Medicare & Medicaid Services (CMS) and private payers use to calculate physician payment.
RVUs are utilized for each service to account for the work performed, practice costs, and malpractice expenses. These RVUs are transformed into payment rates by applying a conversion factor.
When Did This Practice Take Shape?
Prior to the implementation of RVUs, Medicare reimbursed physicians and services based on customary rates, resulting in payment inconsistencies.
In 1989, the Omnibus Budget Reconciliation Act established a Medicare fee schedule. The original RVU was based on data from a 1988 Harvard study where a group of doctors conducted time studies to estimate the work required for various patient care services.
The measure was implemented in 1992. By 2010, it featured approximately 7,000 unique physician services. These services became categorized under a naming system that is linked to the Current Procedural Terminology (CPT) owned by the American Medical Association. Every service listed in the fee schedule is assessed using the resource-based relative value scale (RBRVS) in order to establish a payment.
What Are The Basic Types of RVU?
Three categories of RVUs include:
RVUs for physician work;
RVUs for practice expenses;
RVUs for professional liability insurance.
The total of all three components aims to pay for all costs associated with every medical service. RVUs are the primary factor, reflecting the time, expertise, and work required to provide each service.
The CMS adjusts RVU assignments as the law mandates every five years and when new service codes are created. CMS heavily depends on advice from the Specialty Society Relative Value Scale Update Committee of the American Medical Association for these updates.
What Types Of Practice Impact RVUs?
The American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee, or “RUC,” is an expert panel of providers that makes recommendations to the federal government on the resources required to provide medical services.
It includes 11 organizations of limited license practitioners and allied health professionals that represent:
• Physician Assistants
• Chiropractors
• Nurses
• Occupational Therapists
• Optometrists
• Physical Therapists
• Podiatrists
• Psychologists
• Audiologists
• Speech Pathologists
• Social Workers
• Registered Dieticians
Why Should We Care About RVUs?
Be Sure Compensation Matches Productivity At The Outset
Clinicians required to care for a high volume of patients are sometimes left feeling inadequately compensated.
It is important to ask questions about an office, a facility, or practice prior to joining. Ask about the average number of patients you will be seeing on a daily basis. Ask about procedures too.
While it's typical to receive a base salary along with a production bonus (whether based on RVUs or a percentage of collections), you should be sure that you negotiate an adequate base salary to secure fair compensation. This could be considered your up-front payment, a necessary expense for any employer.
Additionally, a productivity bonus should be reviewed prior to accepting a position and serves as a reward that helps motivate providers to exceed basic requirements.
In the US fee-for-service health care model, providers are often left to divide their attention between patients and the clock.
According to research, brief appointments negatively affect the doctor-patient bond, seen as crucial for quality care, and could be a lost chance to increase patient engagement. Studies indicate that a decrease in communication between patients and physicians lead to higher chances of patients leaving the office feeling frustrated.
Providers also dislike being hurried, but time is essentially equivalent to money in this model, with pay based predominantly on visit volume. Because of this, value-based care (compensation tied to patient outcomes) is gaining popularity as healthcare delivery is restructured in the United States.