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What are RVUs in Medicine?

Malcolm Tatum
By
Updated Feb 05, 2024
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Relative Value Units, or RVUs, are the foundation of the criteria used to measure any type of medical services offered by physicians in the United States. The Relative Value Unit serves as a means of determining the level of reimbursement that is awarded to a physician in exchange for services rendered. Most health insurance providers make use of RVUs to make payments on any claims involving their customers, based on the factors that go into the calculation of an applicable RVU.

There are three key factors that go into the determination of RVUs. The most important element has to do with the issue of work. This factor has to do with the services that were rendered to the patient by the physician, including time spent in active treatment as well as evaluation of test results and any other effort on the part of the physician to create an effective treatment.

The second factor comprising RVUs has to do with the expenses of the doctor’s practice. This includes the maintenance of staff, equipment and facilities that are necessary in order for the medical group to provide quality medical services to patients. While not considered quite as important as the actual work of the physician, practice expenses account for a sizable share of the value of the final RVU.

Lastly, the structure of RVUs takes into account whether or not the medical professional carries physician liability insurance. While this is usually the least important factor in determining RVUs, the lack of insurance is enough to create a less agreeable scale for the physician in comparison to a physician who practices in the same area but does carry the liability coverage.

After arriving at the basic RVU based on these three criteria, the final figure is modified based on the cost of living in a given geographic area. This helps to adjust RVUs so they are more compatible with the current costs of medical care in a particular location. Doing so helps to ensure that the compensation calculated with the use of RVUs is equitable for the area involved.

Since 2000, just about every health insurance provider in the United States makes use of a standard for RVUs developed by the Centers for Medicare and Medicaid Service. Known as Resource-Based Professional Liability Relative Value Units, this standard is used not only by private health insurance providers, but also by the Medicare and Medicaid programs operated in the country.

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Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By anon279168 — On Jul 11, 2012

I am a neurologist who had the opportunity to practice medicine before managed care and am presently using the RVU system.

In my opinion, the RVU system does not work because it incentivises quantity and not quality.

Only patient contacts are being credited, so that a specialist like a radiologist could, for instance, maximize their RVU by reading more tests and not being on call or dealing with patients. If a patient develop a complication during an invasive procedure they say, "Oh, call your pmd," etc.

Surgeons hire PAs and NPs to deal with patients and spend their time in the OR to maximize RVU. Pain specialists inject patients multiple times for chronic pain and GI docs scope everybody, etc.

There is no incentive for talking to a patient, returning phone calls or good bedside manner, or being on call.

Physicians should be compensated like attorneys and that is by billable hours. And their medical societies should guide them in regard to evidenced based medicine and protected against frivolous legal actions.

By anon258897 — On Apr 03, 2012

I have to agree with the sentiment that doctors shouldn't be paid more for doing more. There is a vast scale of difference between a surgeon doing back surgery and a GP treating a child's cough.

Simply stating that doing more is not the same as providing good care and expecting such a blanket statement to stand is ridiculous.

Perhaps a simple thought experiment will demonstrate this fact. Imagine that you broke your arm. Would you be content with a doctor who simply gave you painkillers or would you expect them to actually make an effort to fix the cause of the pain as opposed to just treating the symptoms?

Your argument that RVUs shouldn't be used to determine the value of the treatment creates an atmosphere where a doctor might simply decide that as he can expense the painkillers more favorably than he can expense actually treating your broken arm that he'll do nothing more than give you painkillers and wish you on your way.

More important from a philosophical and economic standpoint is that it takes more training to be able to actually perform surgery to fix a broken bone then give someone painkillers, or as imbeciles on the left call it, palliative care. I don't know about anyone else, but I'd much rather have my arm fixed than be doped up on morphine because the doctor gets no increase in compensation for fixing my arm vs drugging me.

So, yes, there might be doctors that attempt to use RVUs to boost their bottom line, but in that case the most logical solution is to stop subsidizing care of those that can't afford it, or provider only the most basics (not only medicaid recipients to opt for C-sections) instead of attempting to dictate to doctor's the "costs" of their time, expertise, and stress induced by performing surgery.

In another thought experiment, perhaps we can discuss a neurosurgeon performing delicate brain-surgery, would you want that neurosurgeon to actually be motivated to do the job right knowing that he'll not only get well-compensated for fixing the problem or would you be content if it was a mindless bureaucrat that really didn't care because of lousy pay and imbecilic rationing?

Would you want to have emergency surgery knowing that the doctor had already exceeded their quota and thus wasn't going to get normal pay for the procedure and might not be motivated to do a good job? I mean, why freaking bother? It's not like the surgery is going to pay for itself, and who cares if the patient accidentally dies during an over-quota emergency surgery? (Most doctors would still care, but if they're stressed out because of the fact that they are already over the quota set by the state they might just forget that you aren't their enemy, and it's not your fault they are having to dip into their savings to meet payroll, because the compensation offered by the government doesn't actually include enough cover their expenses, and those expenses have jumped because now they are asking their staff to pull overtime to save your life.)

By SailorJerry — On Jun 04, 2011

@MrsWinslow - I agree with you in a lot of ways. Maybe doctors should just be doctors, and not businessmen.

I'm sure that the vast majority of doctor don't work for the RVU, as it were; I'm sure they just want to do what's best for the patient. But there are always a few bad apples, and even a good doctor might face subconscious pressure. If an OB knows s/he's a little short this month, could that even subconsciously affect the decision to do a C-section (knowing it will pay more) instead of trying something non-surgical to help a mother deliver?

By MrsWinslow — On Jun 02, 2011

The fundamental problem with the idea of using RVUs for physician compensation is that doctors wind up being paid more for doing more. And more and more research is showing that more care is not better care, that the US is actually sicker than other countries even though we spend so much on medical care. (And that within the US, areas with higher rates of tests and procedures have worse outcomes.)

Maybe it's time to consider having doctors who work on a salary and whose only consideration is how to get patients better. I suppose then there would probably be pressure from "up above" *not* to do procedures and tests--but we might actually be better off.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
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