There is a
lot to be said about RVUs and medical practice, today we considered it to be
important for all medical candidates to know a little better what RVUs
are and how they are being used in medical practice today, since sooner than
later you will be dealing with this topic it’s important to your formation to
understand it and have a better idea of how it works.
RVUs apply
to almost all medical payments, even when working in private practice, many
patients have their own health insurance and so these insurance companies work
with the RVUs system.
What are RVUs?
To be clear
about it, RVUs stands for Relative value units, this is a formula that is used
to determine the fee a physician should get for their work in practice although
it also serves to measure resource consumption in medical institutions, RVUs
were part of the Resource-Based Relative Value Scale (RBRVS) adopted by
Medicare in 1992.
The system
used by Medicare and many HMOs is called the Resource Based Relative Value Scale
(RBRVS). Every CPT code (a code for each type of procedure or service) has been assigned something called a relative value
unit, or RVU, that determines the cost of a service.
The RVU is
determined by first adding up three components:
·
The work required by the physician: This component takes into
consideration the amount of time, skill, training, and intensity that was
necessary to perform the procedure. Each CPT code is reviewed at least every
five years to determine whether this value should remain the same.
·
The cost of doing business or
maintaining a practice: This includes rent, equipment, supplies, and staff.
·
The malpractice expense or liability
expenses borne by the provider: Malpractice/liability expenses vary among providers. Certain
specialties such as obstetrics tend to involve higher malpractice premiums than
a primary care physician is likely to face.
For each
service, a payment formula contains three RVUs, one for physician work (RVUsw),
one for practice expense RVUPE, and one for malpractice expense RVUMP. On average,
the proportion of costs for Medicare is 52%, 44% and 4%, respectively.
The RBRVS
reimbursement schedule assigns certain values to procedures/costs based upon
Total RVUs. The total RVU consists of three separate components: work (RVUw), practice expense (RVUPE) and
malpractice (RVUMP). Further, Medicare adjusts payment by designating a
geographic price cost index or GPCI and pays differently for the same procedure
depending on the practice location. Another important component is the
Conversion Factor (CF), which converts the RVU into a charge and reimbursement,
the value of the last conversion factor comes from a private group of 29
(mostly specialists) physicians—the American Medical Association's Specialty
Society Relative Value Scale Update Committee (RUC)—have largely determined
Medicare's RVU physician work values.
The payment
formula is:
[(RVUw x
work GPCI) + (RVUPE x PE GPCI) + (RVUMP x malpractice GPCI)] x CF for the year
in question.
It’s kind
of a complicated subject, but also one that affects every physician practicing
in many
This is
something to take in consideration when deciding your specialty, since some
prefer top tier medical procedures although there are less in the market, or a
large amount of simple consultations being this a more steadly income, it’s
something you should know about, consider when deciding your residency and the
way you will work in the future.
Above all
this formulas and methods, there’s always vocation, doing something you like is
always the best choice, but having some knowledge about this topic might give
you a better idea how you will be working in the future in the area you like.
I know I
haven’t covered ALL there is of this topic, but while you are studying for the
boards this information will be helpful, if you have any comments as always
leave them in our comment section, and don’t forget to visit us at www.usmleprepguide.com
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