Understanding RVUs: Ensure Accurate Reimbursement for the E/M Services You Provide

Lisa Eramo April 30th, 2012

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If physicians aren’t familiar with RVUs and the glimpse they provide into patient severity, complexity of services rendered, and reimbursement, they should be.

When was the last time you took a closer look at the Relative Value Units (RVUs) associated with the evaluation and management (E/M) services you provide? How does your data stack up against national benchmarks, and are there areas for improvement in terms of profitability?

If physicians aren’t familiar with RVUs and the glimpse they provide into patient severity, complexity of services rendered, and reimbursement, they should be. Max Reiboldt, CPA, and Justin Chamblee, MAcc, CPA, of the Coker Group, and co-authors of RVUs at Work: Relative Value Units in the Medical Practice, discuss some of the ways in which physicians can use RVUs to ensure accurate reimbursement.

RVU components

RVUs are comprised of three components:

  • Work component
  • Practice expense component
  • Malpractice component

Each component has its own RVU value that is added together and multiplied by the Medicare conversion factor, which converts the RVU to a dollar amount for reimbursement. One caveat is that Medicare applies a geographic practice cost index (GPCI) to each of the individual components to adjust for geographic-specific differences. This means the actual calculation is a two-step process as follows:

  1. [Work RVU x GPCI] + [practice expense RVU x GPCI] + [malpractice RVU x GPCI] = GPCI-adjusted total RVU
  2. GPCI-adjusted total RVU x Medicare conversion factor  = Geographic-specific $$ payment

Dig into your data

Although physicians don’t have any control over individual RVU components, the GPCI, or the Medicare conversion factor, Reiboldt and Chamblee say they can control two factors that directly impact reimbursement:  

  • Patient volume
  • Level of E/M codes reported

Patient volume is relatively straightforward, meaning physicians who increase volume generate more RVUs, which, in turn, yields greater reimbursement. However, when it comes to E/M coding, physicians often tend to be more conservative, coding at a lower level (e.g., 99212 or 99213) when higher-level codes may be more appropriate based on the services they actually perform.

Reiboldt and Chamblee agree that many physicians often perform the work associated with a higher-level E/M code (e.g., 99214) but either don’t document their work sufficiently, or they document it but down-code out of fear that they will be targeted for an audit. In some cases, physicians simply don’t understand the documentation requirements for a higher-level E/M code. In these cases, physicians perform the service but are unaware that what they are doing and perhaps documenting would qualify for a higher code.  

Certified coders can provide specific advice to physicians regarding E/M coding and documentation requirements. Other sources can also lend insights into coding patterns.  For example, national benchmarks outlined in the E/M Bell Curve Data Book 2012: Your Comparative Guide to E/M Billing Patterns of Physician Practices allow physicians to compare their E/M RVUs with national data, says Chamblee. If a physician is substantially under-coding and reporting a lower-than-average volume of 99213 codes as compared with his or her peers, the physician is potentially leaving 50% of the work RVUs on the table. This is assuming he or she has performed the work for a higher level but not documented or coded it correctly, he adds. 

In addition to missed financial opportunities associated with down-coding, there are compliance ramifications, too. Down-coding is equally as inappropriate as over-coding, says Reiboldt. The idea is that insufficient documentation and down-coding denote a deprivation of service to the patient that can affect current care as well as future treatment, he adds.

Physicians have become increasingly more interested in RVUs over the last several years. Reiboldt and Chamblee say approximately 9 out of 10 employment arrangements with hospitals tend to incorporate a physician’s work RVU into his or her overall compensation. Physician practices continue to use RVUs as a management tool to measure productivity, and as practices upgrade to more comprehensive EHRs, it will become even easier to capture and report data relative to RVUs, they say.

Editor’s note: To view specific RVUs for E/M codes, visit the CMS website listing PFS Relative Value Files and unzip the file ‘RVU12AR.’).

Lisa A. Eramo is a freelance writer and editor specializing in medical coding, health information management, and other healthcare regulatory topics. Visit her website at http://lisaeramo.wordpress.com/. Lisa wrote most recently for Getting Paid on CDI in two posts entitled Clinical Documentation Improvement (CDI): How and Why Your Practice Could Benefit and Clinical Documentation Improvement (CDI) in Physician Practices: What’s It All About? Lisa has also recently written on 2012 CPT Code Changes: Reporting Procedures Related to Pacemakers and Cardioverter-Defibrillators, and other articles on 2012 CPT code changes.

You can learn more about RVUs and how to use them to increase your practice profitability in our upcoming webinar, “Using RVUs to Improve Your Bottom Line.” Register now to learn about this important topic with expert speaker Sara Larch, MSHA, FACMPE.

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