Relative Value Units (RVUs)

Relative Value Units, or RVUs, are used to determine the level of reimbursement for the medical services provided by physicians in inpatient or outpatient facilities. Medicare calculates the payment to a physician based in RVU index, which is used as a criteria to measure the resources needed to provide each service.
These resources include 3 components: the physician’s work, the expenses of the physician’s practice and professional liability insurance.

Physician work RVU – The relative level of time, skill, training and intensity as well as on mental effort, judgment, and stress to provide a service. The higher RVU assigned to the code the more time and more intensity it takes to perform the treatment. Physician Work usually comprises about 52% of total Medicare reimbursement on medical service.

Practice Expense RVU – This component addresses the costs of maintaining a practice including rent, equipment, supplies and non-physician staff costs. Medi¬care expenditures on this component of physician service is as high as 44 percent of total payment.

Malpractice RVUs – This component represents payment for the professional liability expenses.

RVU value is also depends on where medical services are provided: in facility or non-facility, such as a hospital or outpatient clinic. When a service is provided in a facility, the costs of the clinical personnel, equipment, and supplies are incurred by the facility and RVUs for particular service typically are lower than the same service when it’s provided in a physician practice facility.

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