RVUs are used to measure the amount of work a physician does, which is often used for to calculate a provider's compensation.
- Examples: Office visit, colonoscopy performed, or gallbladder surgery.
- The Centers for Medicare and Medicaid Services (CMS) updates RVUs annually to account for changes in medicine, technology, and the economy.
- An RVU is made up of these components:
- Physician's work
- Practice expense
- Malpractice Insurance
- Geographic Practice Cost
- Conversion Factor
- Medicare payments are determined by RVUs multiplied by a monetary conversion factor and a geographic adjustment.
Relative Value Units (RVUs) are calculated using the following formula:
- Payment = [(Work RVU x Geographic Practice Cost) + (Practice Expense x Geographic Practice Cost) + (Malpractice Insurance x Geographic Practice Cost)] x Conversion Factor
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