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RVUs: A Reliable Method for Measuring Physician Productivity

Measuring the quality of healthcare can be achieved in multiple ways. For patients, having a friendly doctor who answers all their questions might fit their idea of quality. Most look at healthcare as qualitative, not quantitative.

The Centers for Medicare & Medicaid Services (CMS) defines its quality measures as tools that help measure or quantify healthcare processes, outcomes, patient perceptions, and organizational structure and/or systems that are associated with the ability to provide high-quality health care and/or that relate to one or more quality goals for health care. An article in the Bulletin of the World Health Organization promotes measuring it by clinical and perceived quality, responsiveness and quality as a social construct.

The CMS in 1992 set a national standard to calculate how much to pay physicians based on the amount of time and effort they spend treating patients for services and procedures covered under the Physician Fee Schedule. Called relative value units (RVUs), they’re an important part of medical billing and revenue cycle management and help determine reimbursement rates for Medicare and insurance companies. 

RVUs are a component of the Medicare resource-based relative value scale (RBRVS), a system the American College of Emergency Physicians (ACEP) describes as being used for “describing, quantifying and reimbursing physician services relative to one another.” More than 75 percent of public and private payers have adopted components of the RBRVS to pay physicians.

The RBRVS consists of three components of physician services:

Conquering the Calculation

Like many equations that require math, calculating RVUs isn’t the easiest process. Using a tool designed specifically to accomplish this task, though, can simplify it and save physicians and medical practices time and money.

Before calculating an RVU, it’s essential to know CPT codes and the three parts of the Medicare Physician Payment System: Geographic Practice Cost Indices (GPCI), RVU and conversion factor. The CY 2020 conversion factor is $36.09, up from $36.04 in 2019.

Medicare institutes an RVU for each CPT code to determine reimbursement. ACEP offers a succinct description and corresponding equation for how to figure an RVU:

The reimbursement for a given CPT code is determined by taking the total RVUs for the service and multiplying by the conversion factor. In addition, a geographic adjustment factor (GAF) known as the Geographic Practice Cost Index (GPCI) is applied to account for locality cost differences for work, practice expense and liability coverage around the nation. 

(Work RVU X Work GPCI) + (Practice Expense RVU X PE GPCI) + (PLI or Malpractice) RVU X PLI GPCI)] = Total RVU X Conversion Factor = Medicare payment 

To calculate a“cost per RVU” measure, the formula is: Cost per RVU = (Sum of total expenses) / (Sum of total RVUs).

Providing Perks for Physicians

For many physicians, RVUs are factored into their compensation and demonstrate their value to the practice, hospital or health system that employs them. By tracking RVUs, they can compare their productivity level to that of their colleagues, peers and industry benchmarks. In healthcare, high productivity can result in less waste, decreased costs and increased patient satisfaction.

Tracking RVUs is especially beneficial for doctors who want to grow their practice or take a more active role in the business side of their practice. It provides fact-based documentation of the work they perform and enables them to track patient population, cost accounting, gross charges, net collections and areas of revenue loss.

Optimizing Hospital and Health System Operations

Through a cost analysis based on RVUs, hospitals and health systems are able to establish productivity-based compensation, evaluate and renegotiate payer contracts, evaluate procedures and services and set practice fees. By updating RVUs on a quarterly basis, they have enhanced capability to forecast staffing needs, measure their efficiency and compare physician performance to productivity objectives.

RVUs can be utilized to award physicians for extra effort and allow hospitals to compare clinicians with their peers and promote transparency, accountability and management efficiency. A recommendation for physician practices is to measure their providers’ productivity-per RVU relative to one another by calculating each provider’s revenue and RVUs as a percentage of the practice’s total revenue and RVUs and dividing the results.

Having a centralized location for custom RVU analytics and analogous reports provides a practical and invaluable option for healthcare providers to regularly monitor and address physician productivity. The maxRVU dashboard supplies the ability to pull daily, weekly or monthly RVU totals, view charges and codes per provider or hospital and export all applicable data to a spreadsheet.

Start your free trial of maxRVU to see how easy it is to make your enterprise more profitable.

  • LoneStar Orthopedics

    Being a physician assistant, I see a lot of patients in and out of the hospital. Keeping track of each charge sheet was immensely tedious and I’m pretty sure I lost a few of them. Ever since I started using maxRVU, I haven’t forgotten or lost a single charge. My biller even told me I’m coding more accurately which I think is because I can submit the session right after it happens, rather than waiting like I used to.

  • University of Louisville – Neurosurgery

    The Neurosurgery group at the University of Louisville were in the market for a better way to track individual RVUs for each physician; on top of ensuring every patient encounter was sent to the biller (including the unscheduled ones.) maxRVU became their quick and easy solution to a complex problem, and they’ve never looked back.

  • University of South Alabama – Mitchell Cancer Center

    Obviously I am a big fan of maxRVU. Very user friendly. Y'all have developed an impressive service.

  • Fort Worth Brain & Spine

    maxRVU helps take a worrisome task and turns it into a pretty simple task I don’t worry about. I love that I can scan the patient labels to capture patient information.

  • OrthoSouth

    The customer service has been super responsive and open to my ideas and suggestions.

  • Park Ridge Health

    My first two months after starting to use maxRVU were my two most productive months by far. My office assistant also loves it, and it makes it very easy for her to submit charges. Thanks!

  • ENTiCare

    I enjoy using the program and the main advantage for me has been more accurate procedure coding and wireless real-time communication with my biller; that has resulted in significant reduction in the time needed to process and submit claims.

  • Texas Brain & Spine

    I am very happy with the product. I like the layout and some of the latest features such as bundled codes and scanning of patient information.

  • Lone Star Orthopedics

    maxRVU has helped me streamline my patient billing…no more paper notes stuffed hastily in my pocket or a stack of superbills with hastily scribbled notes for my assistant to interpret. Most importantly, I am recovering all missed billing opportunities and getting insurance payments faster.

  • Atlantic Neurosurgical and Spine Specialists

    I previously relied on a cumbersome system of facesheets, patient stickers, and notecards to track my patient encounters leading to lost revenue. I discovered maxRVU to streamline my billing sessions and this program is incredible.

  • LoneStar Orthopedics

    We looked around and found solutions costing almost twice as much with the added cost of support. We're a midsize group and the savings with maxRVU made our decision a no brainier.

  • The Women's Cancer Center

    maxRVU has been a great tool for communication between our gynecologic oncologist, who spends 3.5 days per week in the operating room, and our billing/coding staff.

  • Austin Cancer Center

    With maxRVU we were able to reduce time to bill from weeks to days from the very start, while getting more visibility on our facility activity.

  • Dr. Baolien Tu

    I appreciate very much all of the hardwork that you have put into upgrading and adding new features to the app. I have not purchased any app (game or productivity) that brings me as much satisfaction as maxRVU. BaoLien Tu, M.D

  • RPG Logo

    Thanks, as always for your prompt attention! It’s the one thing that I value most in our partnership with maxRVU. You really deliver on customer service.

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