Relative Value Units/RVU’s, Whats the Big Deal?

Relative Value Units have been utilized to drive CMS reimbursement calculations since the early 1990’s. There are unique RVU values associated with each CPT billing code charged by a provider. Those values are defined for Practice RVU, Work RVU, and Malpractice RVU. These values are driven by a physician’s time, cost, and effort to provide the billable service and are not driven by quality or clinical outcome. This is boring stuff to most physicians but there is an interesting side to RVU’s. As practices review productivity of their providers, RVU’s provide a comparative tool. Physicians have to be cautious in using these tools as it is easy to draw inaccurate conclusions. A practice needs to make sure it compares providers who have similar patients and clinical services. Otherwise RVU values can be dramatically different. The other significant use of RVU’s relates to physician compensation. Groups and hospitals are utilizing wage per RVU to compensate employed physicians to drive productivity. These models are especially common with hospital employed physicians. RVU’s are becoming more important as changes in healthcare continue to impact physician care models. Being knowledgeable of RVU models can pay off as we move forward with these changes.