Resource Based Relative Value
System
[(Physician Work RVU)x(Work GPCI)] +
[(Practice Expense RVU)x(Practice
Expense GPCI) + [(Malpractice
Expense RVU)x(Malpractice Expense
GPCI)] X Conversion Factor = Fee
Schedule Payment Amount
Background
Since 1992, physicians have been
reimbursed under a fee schedule based on a
national, uniform relative value scale
The scale has been transitioning to a
resource-based methodology, away from
historical costs and payment rates
HCFA uses two data sources : the
Socioeconomic Monitoring System (SMS) and
the Clinical Practice Expert Panel (CPEP)
survey
RVU Components
Each CPT code has a numeric value
assigned to it for physician work, practice
expense and malpractice
These three components add up to the
Total RVU’s for each CPT code
For example :
99213 = 1.32 rvus
rvus
99214 = 2.06 rvus
99203 = 2.39
99204 = 3.47
Physician Work
The work component measures physician
effort, time and expertise
For example :
99213
99214
99291
47135
-
office visit = 0.67 w rvus
office visit = 1.10 w rvus
critical care first hour - 4.00 w rvus
liver transplant - 81.52 w rvus
Practice Expense
The practice expense component
measures the use of overhead, such as
staff and facilities
For example :
99213 - office visit = 0.62 pe rvus
99214 - office visit = 0.92 pe rvus
59400 - obstetrical care = 15.03 pe rvus
Malpractice
The malpractice component measures the
use of liability coverage for physicians,
equipment and staff
For example :
99213 - office visit = .03 mp rvus
99214 - office visit = .04 mp rvus
59400 - obstetrical care = 4.14 mp rvus
Facility versus Non-Facility
Government payors differentiate between
facility (hospital) and non-facility(office)
rates. The practice expense component
changes - work and malpractice remain
the same.
This is referred to as the site of service
differential
Not all codes have a site of service
differential.
Facility versus Non-Facility
For example :
Non-Facility PE
99214
99223
43239
26720
33821
-
office visit
hospital care
upper GI endo
tx fracture
revision vessel
0.92
1.11
4.65
2.41
17.46
Facility PE
0.37
1.11
1.76
1.33
17.46
The non-facility rate is higher, because the
practice covers the overhead costs
Benchmarking Data
Physician work RVUs/year provide a
national measurement with which to
benchmark physician activity. Median
production varies by specialty.
For example :
general internal medicine = 3,814 w rvus/yr
general pediatrics = 4,003 w rvus/yr
orthopedic surgery = 6,402 w rvus/yr
cardiovascular surgery = 7,895 w rvus/yr
Pro, Tech and Global
HCFA defines the component of certain
codes as Pro and Tech
Most of these codes have an “equipment”
component and a “physician
interpretation” component
HCFA uses modifiers as follows :
26 = Professional component
TC = Technical component
Pro, Tech and Global
71010 - chest x-ray
71010 = 0.76 rvus
71010 - 26 = 0.26 rvus
71010 - TC = 0.50 rvus
93510 - heart catheterization
93510 = 45.00 rvus
93510 - 26 = 6.79 rvus
93510 - TC = 38.21 rvus
Note - pro plus tech equals global
UCSF - One more Layer of
Pro, Tech and Global
Because of the routing of charges to IDX
and SMS, UCSF uses prefixes to
differentiate pro and tech components
Prefix 3 = pro = work plus malpractice
Prefix 7 = tech = practice expense
Prefix 2 or no prefix = global
For example :
99213 - pro = 0.70 rvus; tech = 0.62 rvus;
global = 1.32 rvus
Modifiers
Certain modifiers affect reimbursement.
For example :
Modifier 62 - two surgeons = 62.5%
Modifier 80 - assistant surgeon = 16%
Many modifiers do not have federal
guidelines associated with reimbursement.
Treatment of modifiers varies by payor
GPCI : Geographic
Practice Cost Index
The GPCI takes into account geographic
differences in wages, malpractice, etc.
Each RVU component has a GPCI
component. National average GPCI = 1.
For example :
San Francisco
Los Angeles
Tennessee
Work
PE
MP
1.067
1.055
0.975
1.378
1.169
0.900
0.677
0.901
0.572
Conversion Factor
The national conversion factor for 2001 is
$38.2581
The conversion factor converts the RVU to
a fee
Multiply each RVU component by its GPCI
value and total the RVU. Multiply this total
by $38.2581
Conversion Factor
For example :
99214 - office visit at 100% RBRVS
San Francisco = $94.44
Los Angeles = $86.92
Tennessee = $73.58
99214 - office visit at our various contract
rates
85% RBRVS = $80.27
125% RBRVS = $118.05
Budgeting Data
National data - all specialties
Physician work = 54.5%
Practice expense = 42.3%
employee costs = 16.8%
occupancy = 11.6%
other operating expenses = 13.9%
Malpractice = 3.2%
How do each of our departments
compare? How does revenue break-down
compare to expense break-down?
Contracting Data
What % of RBRVS is a good contract?
When does more volume equal profit, and
when does more volume equal loss?
Do our contracted rates cover our costs?
Are our contracts using the current year
RVU table and the San Francisco GPCI?
What are our high volume codes (99214)
that we need to price appropriately?
Where do I get more info?
Go to
http://www.cms.hhs.gov/center/physician.
asp and look for links under
Billing/Payments section. Tables can be
downloaded (you need unzip software).
Some are in text format (if they are
huge). Most are in excel. A word
document accompanies each download
which explains the various data elements.