Relative value units (RVUs) are a measure of value used in the United States
Medicare reimbursement formula for
physician
A physician (American English), medical practitioner (Commonwealth English), medical doctor, or simply doctor, is a health professional who practices medicine, which is concerned with promoting, maintaining or restoring health through th ...
services.
RVUs are a part of the
resource-based relative value scale Resource-based relative value scale (RBRVS) is a schema used to determine how much money medical providers should be paid. It is partially used by Medicare in the United States and by nearly all health maintenance organizations (HMOs).
RBRVS assig ...
(RBRVS).
Background
Before RVUs were used, Medicare paid for physician services using "
usual, customary and reasonable Usual, customary, and reasonable (UCR) is an American method of generating health care prices, described as "more or less whatever doctors decided to charge". According to Steven Schroeder, Wilbur Cohen inserted UCR into the Social Security Act of ...
" rate-setting which led to payment variability.
The
Omnibus Budget Reconciliation Act of 1989
Omnibus may refer to:
Film and television
* ''Omnibus'' (film)
* Omnibus (broadcast), a compilation of Radio or TV episodes
* ''Omnibus'' (UK TV series), an arts-based documentary programme
* ''Omnibus'' (U.S. TV series), an educational prog ...
enacted a Medicare fee schedule, and as of 2010 about 7,000 distinct physician services were listed.
The services are classified under a nomenclature based on the
Current Procedural Terminology (CPT) to which the
American Medical Association
The American Medical Association (AMA) is a professional association and lobbying group of physicians and medical students. Founded in 1847, it is headquartered in Chicago, Illinois. Membership was approximately 240,000 in 2016.
The AMA's sta ...
holds intellectual property rights.
Each service in the fee schedule is scored under the
resource-based relative value scale Resource-based relative value scale (RBRVS) is a schema used to determine how much money medical providers should be paid. It is partially used by Medicare in the United States and by nearly all health maintenance organizations (HMOs).
RBRVS assig ...
(RBRVS) to determine a payment.
Use
For each service, a payment formula contains three RVUs, one for ''physician work'', one for ''practice expense'', and one for ''malpractice expense''. On average, the proportion of costs for Medicare are 52%, 44% and 4%, respectively.
The three RVUs for a given service are each multiplied by a unique geographic practice cost index, referred to as the GPCI adjustment. The GPCI adjustment has been implemented to account for differences in wages and overhead costs across regions of the country.
The sum of the three geographically weighted RVU values is then multiplied by the Medicare conversion factor to obtain a final price.
Historically, a private group of 29 (mostly
specialist) physicians—the
American Medical Association
The American Medical Association (AMA) is a professional association and lobbying group of physicians and medical students. Founded in 1847, it is headquartered in Chicago, Illinois. Membership was approximately 240,000 in 2016.
The AMA's sta ...
's
Specialty Society Relative Value Scale Update Committee
The Specialty Society Relative Value Scale Update Committee or Relative Value Update Committee (RUC, pronounced "ruck") is a volunteer group of 31 physicians who have made highly influential recommendations on how to value a physician's work when ...
(RUC)—have largely determined Medicare's RVU physician work values.
See also
*
Healthcare Common Procedure Coding System The Healthcare Common Procedure Coding System (HCPCS, often pronounced by its acronym as "hick picks") is a set of health care procedure codes based on the American Medical Association's Current Procedural Terminology (CPT).
History
The acronym '' ...
References
External links
The BasicsFederal RegisterMedscape.com*
*
*{{cite news , title=The hidden public-private cartel that sets health care prices , author=Darshak Sanghavi , newspaper=
Slate , date=Sep 2, 2009, url=http://www.slate.com/articles/news_and_politics/prescriptions/2009/09/the_fix_is_in.html , accessdate=January 7, 2012
Work RVU Calculator
Medicare and Medicaid (United States)