At the simplest, Relative Value Units (RVUs) measure the value used in Medicare reimbursements for physician services.
But the complexity increases because RVUs are part of the resource-based relative value scale (RBRVS), which is a way of determining how much money providers should be paid, based on their productivity. RBRVS assign a relative value to providers, adjusted for geographic location. This value is then multiplied by a conversion factor, which changes annually, to determine the amount physicians should be paid.
According to a National Health Policy Forum report on RVUs, Medicare uses a physician fee schedule to determine payments for more than 7,500 different physician services.
The National Health Policy Forum says that for each service, Medicare determines RVUs for three resources: work RVUs account for the time, technical skill and effort, mental effort and judgment, and stress to provide a service. The work-RVU is related to the direct expenses associated with what the physician receives for payment in salary and benefits. Practice expense RVUs account for non-physician clinical and non-clinical labor, as well as expenses for office space, equipment, and supplies. Malpractice RVUs account for the cost of professional liability insurance. Although the actual percentages vary from service-to-service, the National Health Policy Forum says physician work and practice expenses comprise 52 and 44 percent of the total Medicare expenditures for physician services.
Estimating and updating the RVUs is a labor-intensive process because there are no readily available, up-to-date data resource requirements for each service.
Making a profit and sharing in the risk
An RVUs value is its ability to allow providers to take part in the profitability and performance of the health care organization. However, to achieve profitability, providers must share some risk. And, because the measure of RVUs is on productivity, there’s a chance of misinterpreting its purpose.
RVUs are not condition codes such as the Hierarchical Condition Codes or ICD-10, which show a patient’s condition and treatment; RVUs are closely connected to provider’s profits.
In the past, for a physician to get paid more — and do more — he or she had to get more RVUs, meaning higher payments.
RVUs encouraged, and rewarded, physicians for seeing more patients. However, seeing more patients meant patient satisfaction tumbled, according to numerous surveys given to patients following a hospital or physician practice visit.
Patients were viewed merely as items on an assembly line. For example, one patient having a colonoscopy was viewed the same as every other colonoscopy.
Patient satisfaction surveys showed that physicians needed to slow down. Patient satisfaction put patients squarely back at the center of care delivery. And, with higher patient satisfaction scores came higher physician payments.
RVUs are important to the overall payment to physicians, however, RVUs alone aren’t a good way to pay physicians. Another important aspect to higher pay for providers is improved documentation.
A common issue with physician documentation is that the provider is not being specific enough in his or her coding of interactions with patients.
For example, when a doctor performs a surgical procedure of the spine, he or she may report back that ‘surgery was performed on lumbar segments L1 through L4,’ when what they really meant to say was that they ‘performed surgery on lumbar segments L1 to L2, L2 to L3, L3 to L4.’ Documenting the procedure this way is more accurate and gets the physician a higher RVU.
Physicians incorrectly assume insurance companies know what they mean when they document ‘lumbar sections L1 through L4.’ However, the documentation must align with the procedure codes and accurately reflect what’s billed. Coders read the documentation and assume the physician has coded the procedure correctly. However, when physicians are asked: Did you mean L1 through L4, or subsequent L1 to L2, we find out they meant L1 to L2, L2 to L3, etc.?
Often, an organization’s internal coders do a good job of drilling down into the procedure codes, and the coder will ask the physician to clarify their coding. As long as the documentation is there, this incentivize the physicians on how many codes they use an accurately tells the story of the procedure they are documenting.
This puts the patient back at the center of the care.
Healthcare must be smarter, as a physician’s success hinges on keeping the patient informed. Physicians should be educated on the importance of documenting as specifically as possible.
RVUs can lead to improved documentation and better coding, getting to a level of specificity about the care physicians provide to patients. Physicians must document more about their patient interactions in order to get higher RVUs.
Those of us who understand clinical workflows can assist physicians in documenting their patient exchanges. This will ensure physicians are getting the highest RVUs possible and documenting everything from the encounter with the patient.
Such an approach will foster a synergy where everyone is working towards a common goal: the patient.