How to Keep Your Income Up as RVUs Transition Away

Deborah Walker Keegan, PhD

January 03, 2013

Introduction

The relative value unit (RVU) is becoming less relevant, given the changes in the healthcare reimbursement environment.* This will have an enormous impact on physicians' incomes. Doctors who are prepared to make the transition from volume to value will be better positioned to protect their income and will be better prepared to successfully deal with new payment systems that are sure to emerge.

Deborah Walker Keegan, PhD

The resource-based relative value scale is currently how Medicare (and many other payers) set their payments for physician services. Government and commercial payers are now exploring ways to transition payments away from visit and procedure volume to value-driven care, which is defined as the health outcome per dollar of cost expended. Value-based payment methods are quickly shedding light on the pitfalls of an RVU-based world.

RVUs are also inconsistent with the changing delivery system. There are no RVU values for virtual medicine involving secure email messaging; e-visits; virtual consults; mobile health; and patient-supported, self-directed care. As healthcare is taken out of the examination room and as physicians direct the care of an ever-expanding care team, from nurse practitioners to case managers to care navigators, other care delivery channels are growing in importance. Patient care is now provided beyond the traditional face-to-face visit and the physical constraints of the examination room (and a related Current Procedural Terminology [CPT] code).

There are 3 reasons why physicians should not rely on the RVU as a primary metric to assess a medical practice's performance and to distribute revenue to physicians: (1) value-based reimbursement; (2) the changing delivery system; and (3) physician compensation alignment.

^*Current procedural terminology (CPT) codes (a trademark of the American Medical Association) are the codes that physicians select for the services they render. Linked to each CPT code is a RVU that includes 3 separate components: work RVUs that are intended to measure physician work effort; practice expense RVUs that reflect service costs; and malpractice RVUs that reveal relative service risk.