Relative value units. (Practice Management Clinic).Relative value units (RVUs) quantify the different values of the different services that you provide. For example, the removal of an acoustic neuroma Acoustic Neuroma Definition An acoustic neuroma is a benign tumor involving cells of the myelin sheath that surrounds the vestibulocochlear nerve (eighth cranial nerve). is assigned a higher number of RVUs than is the removal of cerumen cerumen /ce·ru·men/ (se-roo´men) earwax; the waxlike substance found within the external meatus of the ear.ceru´minalceru´minous ce·ru·men n. . RVUs are published in the Federal Register each November. They are calculated on the basis of the amount of work required (which accounts for 46% of the total RVU RVU Relative value unit, see there ), the expense to the practice (50%), and the cost of malpractice insurance (4%). RVUs vary in different parts of the United States because they are adjusted in accordance with the Geographic Practice Cost Index geographic practice cost index Managed care A scale defined by Medicare based on the relative costs of practicing medicine in specific geographic location. See RBRVS, Work adjuster. (GPCI GPCI Geographic Practice Cost Indices (factor used in pricing medical services) GPCI Graphics Processor Command Interface GPCI Grant Professional Certification Institute GPCI Grand Prix Club International ). If the cost of living in your geographic area is exactly the same as the national average, your GPCI is 1.0. Areas where the cost of living is higher and lower than average are assigned correspondingly higher and lower GPCIs. For example, the nationwide average number of RVUs that Medicare assigns to a tonsillectomy and adenoidectomy Tonsillectomy and Adenoidectomy Definition Tonsillectomy and adenoidectomy (T & A) are surgical procedures to remove the tonsils from the back of the mouth or adenoids from the back of the nasal cavity—both are are part of the lymphatic procedure (CPT CPT See: Carriage Paid To 42820) is 7.54 in 2003 (was 8.21 in 2002). In Indianapolis, however, the cost of living is calculated lower than the national average, and this difference is reflected in our lower-than-average GPCIs for work (0.981), expense (0.922), and malpractice (0.481). Therefore, when the GPCIs for Indianapolis are factored into the equation, a tonsillectomy and adenoidectomy procedure here is assigned 7.06 RVUs in 2003 (was 7.69 in 2002). Note that the 4.4% reduction in the 2003 Medicare conversion factor ($34.59 vs $36.20 in 2002) plus t he 0.63 reduction in RVUs for CPT 42820 results in a 2003 payment (effective 3/1/03) of $244.51 vs $278.38. That is a 12.16% reduction. Your software should be able to calculate and keep track of all the RVUs you generate (figure). To make such calculations, divide your revenue by the total RVUs to arrive at the revenue/RVU figure. Then total all your costs (except for physician-related expenses) and divide that figure by total RVUs to arrive at the cost/RVU figure. Once you know these figures, you can take steps to ensure that (1) your contracts are paying you more than your cost/RVU and (2) your revenue/RVU is greater than your cost/RVU. Finally, be sure that at least one of the parameters you use to determine your fee schedules is based on the 2003 Medicare conversion factor for RVUs. Dr. Isenberg is an otolaryngologist in private practice in Indianapolis; sisenberg@good4docs.com |
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