The Work Relative Value Unit

The great majority of physicians today, practice as hospital employees or in a multispecialty group that is directly or indirectly owned by the hospital.  This employment model typically provides the physician with a 1-2 year salary guarantee and a productivity bonus called Work Relative Value Units (wRVU).  The wRVU basically takes an average of all the various insurances.  This allows you to receive the same rate of pay for all patients, regardless of their insurance.

 The wRVU is a unit of measurement for the performance of medical services. The overall RVU includes the professional component provided by a healthcare professional, such as a physician.  Everything a physician does in the process of delivering care to a patient has a unit value.  The wRVU accounts for the time, technical skill and effort, mental effort and judgment, and stress to provide a particular service.  Each diagnosis, consultation, or procedure has a corresponding Current Procedural Terminology (CPT) code. Each CPT code has a corresponding wRVU.  HCPCS Codes (Healthcare Common Procedure Coding System codes) are the codes used by Medicare and monitored by CMS, the Centers for Medicare and Medicaid Services. They are based on and are identical to CPT codes developed by the American Medical Association.

CPT and HCPCS Codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical, and diagnostic services. Having everyone use the same codes to mean the same thing ensures uniformity. For example, no matter what doctor a patient visits for an allergy injection (code 95115), Medicare will pay that doctor the same amount as another doctor in the same geographic region.

Some examples of HCPCS / CPT Codes for a Family Practice physician:

New Patient-Outpatient office visit (wRVU value)

 99201-(.5 Approximate Unit Value) Office or other outpatient visit for the evaluation and management of a new patient, which requires these three key components: a problem focused history; a problem focused examination; and straightforward medical decision making. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problems are self-limited or minor. Physicians typically spend 10 minutes face-to-face with the patient and/or family.

99202– (1.0 Approximate Unit Value) Office or other outpatient visit for the evaluation and management of a new patient, which requires these three key components: an expanded problem focused history; an expanded problem focused examination; and straightforward medical decision making.  Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of low to moderate severity. Physicians typically spend 20 minutes face-to-face with the patient and/or family.

Once we have determined the relative value of each patient encounter, we can total the number of work units, and multiply that number by the RVU reimbursement rate expressed in dollars per unit.

For example, if you see 10 patients (99201 with a .5 Unit Value) and 15 patients (99202 with a 1.0 unit value) you would generate 20 units of work for that day.

99201 (.5) x 10 = 5

99202 (1.0) x 15 = 15

Total- 20 units per day

If you work five days a week (20 units x 5 days =100 units/week), 48 weeks a year, you would generate 4800 units of work annually.  According to the Medical Group Management Association, the average family physician generates approximately 4800 RVUs annually, with an average reimbursement rate per of $49 per unit of work, for an average annual income of $235,200.

For additional insights on the work relative value unit discussion, give us a call.

  • Chris Kahl

Doctor using a smart phone in hospital. Concept of medical appointment, communication.