Reimbursement and Relative Value Units
I am an APN employed by a hospital-managed primary care physician's group. The hospital would like to change the way that I am reimbursed to the same formula that they plan to use to reimburse the physicians. The new plan uses RVUs (relative value units), a system that is heavily weighted to high reimbursement for treating inpatients and the very ill. I don't perform hospital or complex care, so will this be a reasonable and fair reimbursement plan for me?
Response from Carolyn Buppert, NP, JD
Attorney, Private Practice, Annapolis, Maryland
The answer is "probably," but you'll need to run some numbers based on your activities. How you do will depend upon the numbers of patients you see and the Current Procedural Terminology (CPT) codes you bill. It is true that the work RVUs for evaluation and management in the hospital setting are generally higher than the work RVUs for evaluation and management of patients in the office setting.
The work RVUs for evaluation and management of an established patient in the office are:
Level 1 visit .17
Level 2 visit .45
Level 3 visit .67
Level 4 visit 1.10
Level 5 visit 1.70
The work RVUs for evaluation and management of a hospitalized patient, subsequent visits, are:
Level 1 visit .64
Level 2 visit 1.06
Level 3 visit 1.51
So, as you can see, if you perform many level 3 and level 4 visits in the office, your RVUs may be as high as those of a physician who performs many level 1 and level 2 visits in the hospital. However, if you code most of your patients at level 2, you will not do as well.
The Resource-Based Relative Value Scale (RBRVS) assigns a relative value to each CPT code relative to all of the other CPT codes. The RBRVS was developed for the Center for Medicare and Medicaid Services (CMS), and in 1992, Medicare established its standardized physician payment schedule and based the schedule on the RBRVS.
RVUs are determined by committees of the American Medical Association. The committees' members come from all medical specialties and include representatives from other health professions, including nursing. The committees assign a relative value after hearing testimony from specialty groups on how many hours or minutes it takes to perform a procedure, the level of skill required, the level of education/training required, and the practice expense associated with a procedure.
There are 3 components to a relative value: practice expense, work, and malpractice.
Each component is adjusted geographically using 3 separate Geographic Practice Cost Indexes (GPCI). The final formula to arrive at an area's specific relative value is:
(Practice Expense RV x Practice Expense GPCI)
+
(Work RV x Work GPCI)
+
(Malpractice RV x Malpractice GPCI)
______________________________________
= Relative value
The relative value is then multiplied by a single nationally uniform "conversion factor" to arrive at a monetary value. The conversion factor for 2006 is 37.8975.
For example, if for CPT 99214, the work RVU is 1.10, the practice expense RVU is 1.03, and the malpractice RVU is 0.05; therefore, the total RVU for that CPT code will be 2.18. To convert the RVU to a monetary amount, multiply by the conversion factor (37.8975). The payment for 99214 in 2006 using the values above would be $82.61. Note that practice and malpractice expense RVUs vary depending upon geographic location and specialty.
For your purposes, you and the practice could use either the work RVU or the value, which includes the malpractice and practice expenses, depending upon whether your malpractice expense is less than that of the physicians in the practice and depending upon whether your practice's expenses are above or below the norm. Generally, the work RVU is going to be the fairest way to compare the value of the work you do relative to others in the practice.
All of the RVUs can be downloaded from the CMS Web site. RVUs are updated annually and reviewed in depth every 5 years.
Question
I am an APN employed by a hospital-managed primary care physician's group. The hospital would like to change the way that I am reimbursed to the same formula that they plan to use to reimburse the physicians. The new plan uses RVUs (relative value units), a system that is heavily weighted to high reimbursement for treating inpatients and the very ill. I don't perform hospital or complex care, so will this be a reasonable and fair reimbursement plan for me?
Response from The Expert Carolyn Buppert, NP, JD
Response from Carolyn Buppert, NP, JD
Attorney, Private Practice, Annapolis, Maryland
The answer is "probably," but you'll need to run some numbers based on your activities. How you do will depend upon the numbers of patients you see and the Current Procedural Terminology (CPT) codes you bill. It is true that the work RVUs for evaluation and management in the hospital setting are generally higher than the work RVUs for evaluation and management of patients in the office setting.
The work RVUs for evaluation and management of an established patient in the office are:
Level 1 visit .17
Level 2 visit .45
Level 3 visit .67
Level 4 visit 1.10
Level 5 visit 1.70
The work RVUs for evaluation and management of a hospitalized patient, subsequent visits, are:
Level 1 visit .64
Level 2 visit 1.06
Level 3 visit 1.51
So, as you can see, if you perform many level 3 and level 4 visits in the office, your RVUs may be as high as those of a physician who performs many level 1 and level 2 visits in the hospital. However, if you code most of your patients at level 2, you will not do as well.
The Resource-Based Relative Value Scale (RBRVS) assigns a relative value to each CPT code relative to all of the other CPT codes. The RBRVS was developed for the Center for Medicare and Medicaid Services (CMS), and in 1992, Medicare established its standardized physician payment schedule and based the schedule on the RBRVS.
RVUs are determined by committees of the American Medical Association. The committees' members come from all medical specialties and include representatives from other health professions, including nursing. The committees assign a relative value after hearing testimony from specialty groups on how many hours or minutes it takes to perform a procedure, the level of skill required, the level of education/training required, and the practice expense associated with a procedure.
There are 3 components to a relative value: practice expense, work, and malpractice.
Each component is adjusted geographically using 3 separate Geographic Practice Cost Indexes (GPCI). The final formula to arrive at an area's specific relative value is:
(Practice Expense RV x Practice Expense GPCI)
+
(Work RV x Work GPCI)
+
(Malpractice RV x Malpractice GPCI)
______________________________________
= Relative value
The relative value is then multiplied by a single nationally uniform "conversion factor" to arrive at a monetary value. The conversion factor for 2006 is 37.8975.
For example, if for CPT 99214, the work RVU is 1.10, the practice expense RVU is 1.03, and the malpractice RVU is 0.05; therefore, the total RVU for that CPT code will be 2.18. To convert the RVU to a monetary amount, multiply by the conversion factor (37.8975). The payment for 99214 in 2006 using the values above would be $82.61. Note that practice and malpractice expense RVUs vary depending upon geographic location and specialty.
For your purposes, you and the practice could use either the work RVU or the value, which includes the malpractice and practice expenses, depending upon whether your malpractice expense is less than that of the physicians in the practice and depending upon whether your practice's expenses are above or below the norm. Generally, the work RVU is going to be the fairest way to compare the value of the work you do relative to others in the practice.
All of the RVUs can be downloaded from the CMS Web site. RVUs are updated annually and reviewed in depth every 5 years.