Importance of RVUs for Reimbursement

Importance of RVUs for Reimbursement

For the past several generations, there were several options that medical practices could use to determine the overall compensation and physician productivity calculations. These figures were based on a number of different factors that were specific to a medical practice and affected the prices that patients and insurance companies were expected to pay. Some physicians may have taken advantage of their position and charge exuberant amounts, but more often than not, medical care providers were likely to undervalue their services and price themselves out of the proverbial market.

Relative Value Units Model

To create a semblance of order and uniformity, the Relative Value Units (RVUs) model was developed to help physicians track their time in accordance with services offered. By 2007, approximately 16% percent of group medical practices were using the RVUs model, and just a few short years later in 2011, almost 75% of group practitioners were using the model. There are many reasons that the model caught on so quickly and was rapidly adapted by so many groups in such a short time. For the first time in their career, many doctors were finding a simplified method to developing fee schedules, billing and coding shortcuts and accurate recording systems.

The History

The Medical Group Management Association published the outline of the Relative Value Units model in the Physician Compensation and Productivity Report in an effort to increase awareness and promote a better understanding of a new model. Prior to this simplified example, many practitioners were resistant to change because of past negative experiences. Previously, productivity and compensation models were largely ineffective and required more work to learn and maintain than they were actually worth.

It was clear that a new system was needed, but few people in the industry had an idea about a potential solution. As a result, most medical practices used their own customized versions of billing systems. Few had updated productivity guides and even fewer practices were able to succinctly explain their compensation system on a detailed scale.

How RVUs Work

The beauty of the Relative Value Units model is that it is easily understood and relatively stable. The fact that the model is unlikely to change often adds to the appeal for frustrated and overworked physicians. Specific points are assigned to routine visits and medical procedures or testing to account for how much time a physician spent on average attending to these tasks. These overall numbers led to a better understanding of not only the productivity levels of a medical practice but also the time management skills of the medical professionals operating within the practice.

Specifically, when RVUs are established, they reflect the comparative level of the time, skill, training, and intensity required for a medical practitioner or physician to provide a particular service to a patient. In this light, RVUs are a useful method for calculating the volume of the patient load and the effort expended by a physician in treating their patient workloads.

An annual physical, does not take much time to complete, and therefore, is given a RVU that is lower than an invasive surgical procedure. This involves the physician to be away from the office for several hours, spending that time with one patient. Based on the relative scale, a physician treating a few complex cases or chronic patients per day will accumulate more RVUs than a practitioner who  sees 10 or more patients per day, who are considered low RVU because they are relatively healthy and do not require extended visits. This way, the actual work completed is being evaluated, rather than simply the number of patients seen in a day.

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