Pros and Cons to RVU’s
We had an incredible turnout for our updated webinar on RVUs a few weeks ago. We knew this was going to be a hot topic, but seeing the interest further confirmed that. In case you missed that webinar, you can check it out here, but for those of you who want to dive in a little more, we are going to discuss the pros and cons of a RVU.
What is a Relative Value Unit (RVU)?
In 1992, Medicare changed physician payments. They worked with AMA to create a standardized fee schedule based on RVUs and CPT coding. The dollar amount is determined by calculating: the physician’s work, practice expenses, and malpractice insurance.
Physician Work is divided into 4 subcomponents (wRVU):
1. Time it takes to perform the service
2. Technical skill and/or physical effort required to perform the service
3. Amount of mental effort and judgment required
4. Stress arising from any potential risk to the patient from performing the service
RVUs are derived from the billing process and are assigned to a CPT code to determine reimbursements. RVUs do not change based on the provider rendering the service. They are based on the level of difficulty of a procedure or level/acuity of the patient evaluation. So the more complex a patient interaction is, the more wRVUs assigned!
What should be avg RVUs for a Midwife in a day/year?
It is pretty clear what the average RVUs day/year is and should be for OB/GYNs, but for Midwives it is not so clear. Why? Because of:
-Confounding variables for APPs Incident-to billing (now even stricter CMS rules in ‘23)
-Shared visit billing
-Coding by billing provider instead of rendering provider
-Formula was not designed for APPs
This uncertainty is what can lead to some potential advantages but also potential disadvantages of the RVU model for midwives.
Potential Advantages of RVUs
-Could bonus on equivalent RVU (does not account for provider type)
-Encourages provider to have steady stream of patients
-Causes competition to get more new patients
-Encourages provider to be more PRODUCTIVE, likely to see more patients and perform more evaluations and procedures
-Paid on code submitted — not codes collected and paid for
-Not affected by differential in insurance payments
Disadvantages of RVUs for APPs
-Only RVUs based comp/salary, leads to practitioners burning out and leaving
-Some RVUs paid on sliding scale, ramping up competition among team
-RVUs do not pay for everything you do –
-Less likely to refer patients and more likely to compete for new patients
-Paid for volume of care not QUALITY of care
-ALL Bundled or Global procedures pay less
-Modifiers can create less RVU value
-INCORRECT codes or under coding will contribute to under performing
What can Midwives do about RVUs?
You can learn the language being used and ASK questions! Like, what is the Conversion Factor (CF), if not written in contract? Is there a difference between Physician and APP benchmark and CF? And is any non billable time tracked, valued and/or compensated? These are things you can learn more about by watching our webinar!
Other things you can do are:
-Request data that was used that set the RVUs method outlined
-Get to know Office staff coders, self audit and request monthly reports
-Understand how politics play in productivity measurement
-Keep log of all non-billables that add value
-Consider Midwives pool RVUs and team bonus rather than provider competition
In order to effectively negotiate, it is important to understand the language and metrics described within the agreement. If you need help looking through your contracts or negotiating for what you deserve, send us a message!