Improve Practice Performance with RVUs

What are RVUs?

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Relative value units (RVUs) were adopted by Medicare in 1992 and have since become the standard measurement for analyzing reimbursement, payer contracts, physician productivity, physician compensation and staffing and operational costs.

Medicare RVUs include three components:

  1. Physician work RVU
  2. Practice expense RVU
  3. Malpractice expense RVU

RVUs can be calculated with the following formula:

Physician Work RVU (wRVU) + Practice Expense RVU (peRVU) + Malpractice Expense RVU (mpRVU) = Total RVU (TRVU). TRVU X Conversation Factor (CF) = Fee Schedule (allowable reimbursement) X Geographic Practice Cost Index (GCPI)

RVU data offers an advantage over other analytics by removing other variables that can make results confusing. RVU data makes it possible to measure and compare the productive contribution of providers whose services have varying levels of reimbursement dollars. In essence, this levels the playing field and makes units of productivity comparable across specialties and organizations.

How Can You Use RVU Data?

  • To analyze your reimbursement from Medicare and other payers
  • To evaluate your fee schedule
  • To evaluate staffing and operating costs
  • To calculate physician compensation and evaluate productivity

Most EHR and practice management systems include standard reports that make it easy to use RVU data for analysis. Select systems may also include features that enable more advanced analysis and dashboards that allow you to view RVU data at a glance.

Want more tips on improving practice performance? Check out four ways to boost profit margin at your medical practice.