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Back to the blogFeb 27, 2022

What Does RVU Mean in Medical Billing?

What Does RVU Mean in Medical Billing?

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RVU stands for Relative Value Units and they are often used to factor compensation. What is the value of the services you provide to your patients? While no one factor defines the compensation for your doctors, RVUs are one factor that acts as an indicator to define the value of medical treatments, procedures, and services you offer.  

At TempDev, we offer the dashboards and reports you need to understand and analyze the RVUs for your practice. Since RVUs are not affected by your fee schedule, it can allow you to simplify your analysis of payer and reimbursement contracts.  

What Are Relative Value Units (RVUs)?

The Relative Value Units (RVUs) are factored into the Resource-Based Relative Value Scale (RBRVS), which the Centers for Medicare & Medicaid Services (CMS) and other insurance providers use to figure out reimbursement.  

It’s important for you to understand the factors that are involved in deciding the Relative Value Units because it allows you to better understand how the entire medical billing process works. With TempDev’s help, you can better understand the RVU factors and how their customizable NextGen Reports will streamline your physician compensation process.  

What Are Relative Value Unit Factors?  

As part of the medical billing process, you’ll show the full amount that you charge for your medical service, procedure, or treatment; but that doesn’t mean that you’ll be paid the full amount. The RVUs determine the value of what you’re billing for, based on a few factors:  

    Instead of focusing so much on RVU models of payment, value-based medicine is one more cost-effective way that some healthcare organizations are encouraging patients to improve their own health. It not only allows patients to save money on their healthcare, but it allows physicians to focus more on preventative care and chronic condition management. TempDev can support your medical billing with the framework of support and services that will best meet your needs.  

    What Are the Types of Relative Value Units? 

    The RBRVS looks at three main types of RVUs to determine reimbursement compensation. While these categories are rather broad and all-encompassing, the value is also subject to adjustment by CMS on an annual basis, based on the recommendations of the American Medical Association’s Specialty Society Relative Value Scale Update Committee (RUC). Here’s a quick overview of the RVU types:  

    Work RVUs 

    The level of compensation is based on the productivity of the physician. This RVU directly impacts how many patients they might process in each timeframe. The more patients your doctors process, the more revenue they earn. Of course, the work RVUs don’t consider the complexities of patient management and care variables like chronic health conditions. Nor do they consider other duties or requirements that will slow down the workflows of everyone involved. The work RVUs are factored at ~51% of the total RVU. 

    Malpractice (MP) RVUs 

    The compensation considers the cost of liability expenses, particularly as some services and procedures require more coverage due to the risk associated with the medical care. This type of RVU accounts for just over 4% of the total RVUs.  

    Practice expense (PE) RVUs 

    This type of RVU stands for the cost of labor for staff and other practice expenses. It can consider everything from the cost of the building space, office equipment, office and medical supplies, and other operational costs for the clinic or medical practice. Practice expense accounts for ~45% of the total RVUs.  

    How TempDev Can Help You Improve Your Medical Billing System? 

    TempDev’s offers the tools, templates, and other resources you need to understand and address your revenue cycle reporting, including medical billing. To help you better understand and streamline your medical billing processes, TempDev offers best practicestraining, and hands-on solutions to redesign your workflow and support your staff.  

    With support from NextGen Revenue Cycle Management TempBill, you can dramatically improve your medical billing cycle, which is a positive for any organization. As part of implementing effective new processes and procedures, you’ll identify trends, increase productivity, and better track the financial performance of every aspect of your organization.  

    That can mean significant cost savings and improvements in every aspect of your organization’s revenue cycle management. It doesn’t happen overnight, but with TempDev’s consulting and support, you could see unexpected levels of profitability at a time when most healthcare organizations are still looking to get out of the red.  

    Contact us here or by calling at 888.TEMP.DEV to learn how we can help optimize your revenue cycle management. 


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