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.
