How are Relative Value Units (“RVUs”) Used? For reimbursement purposes, a fixed dollar amount called a Conversion Factor (“CF”) is multiplied times the number of RVUs assigned to a specific procedure.
Medicare establishes a Conversion Factor each year and for 2016, Medicare’s CF is $35.8279 per RVU. Therefore, if a procedure has an RVU of 1.00, Medicare will approve $35.83 for payment. If the RVU is 2.00, Medicare will approve 2 times $35.8279 or $71.86.
Other governmental payors and commercial payors each have their own payment rates but most payors utilize a consistent Conversion Factor applied to the applicable RVUs. For example, for purposes of this discussion, we will assume a Medicare reimbursement of $35.83 and an average commercial payor reimbursement of $50.00.
Here are a few radiology and pathology procedures and their RVU assignments for comparison:
|71020||Radiology||Chest 2 View||0.22||0.08||0.01||0.31|
|74177||Radiology||CT Abdomen/Pelvis with Contrast||1.82||0.68||0.10||2.60|
|88305||Pathology||Tissue Exam by Pathologist||0.75||0.34||0.02||1.11|
|88307||Pathology||Tissue Exam by Pathologist||1.59||0.81||0.04||2.44|
As shown in the table above, the methodology of RVUs allows procedures to be weighted to account for their complexity and expenses associated with the procedure. This immediately creates a more valid metric than a simple count of how many procedures were performed.
Based on Medicare’s CF of $35.8279 per RVU and using a hypothetical $50.00 per RVU (~140% of Medicare) as an average reimbursement by all of a practice’s commercial payors, here is how a radiologist or pathologist would be reimbursed for these procedures:
|CPT Code||Procedure||Total RVU||Medicare
|71020||Radiology||Chest 2 View||0.31||11.11||15.50|
|74177||Radiology||CT Abdomen/Pelvis with Contrast||2.60||93.15||130.00|
|88305||Pathology||Tissue Exam by Pathologist||1.11||39.77||55.50|
|88307||Pathology||Tissue Exam by Pathologist||2.44||87.42||122.00|