US healthcare is operating on an excellent performance by rendering services of their practicing providers in an extensive healthcare system. Therefore, CMS has devised several modules to not only maintain their tradition of trust in healthcare services but also introduced several laws and systems to support their providers in every possible way.
wRVU calc is such an initiative by CMS to give the providers their RVU compensation based on the service they cater to their patients. wRVUs basically measures the work volume and time investment in facilitating patients. Medical Billing, health insurers, or patients file claims to aid in the reimbursement process in the healthcare industry.
RVUs, an acronym for relative value units, is a requirement for this reimbursement. The payments from Medicaid, Medicare, and private health insurance depend on it as well.
Billing departments in every hospital or healthcare organization make the bill and coders then generate the claim by coding the fee for service rendered using HCPCS / CPT codes.
Once the hospital receives the reimbursement successfully either from a patient out from their medical insurance provider, then they have to pay their providers. They do so by calculating RVUs.
You might be thinking how wRVU calc is benefiting in provider reimbursements. And what is the procedure for calculating RVUs and wRVU compensation of any provider? Let’s see it in depth for more understanding.
What the Heck wRVU calc is?
An easy and simple way of finding out the cost of care and services rendered by providers is by using these precise sorts of units that are used by Medicare to calculate the cost of care. The abbreviation RVU stands for Relative Value Units in the context of medical billing. wRVUs are in fact, standardized units which make it simple for hospitals to pay physicians based on the services they offer and their productivity.
What was the Ground for wRVU inclusion?
Thanks to these standard units, called RVUs allowing remuneration to be determined based on the services rendered. Mainly, the competence and performance of a doctor are assessed by calculating RVUs. It also aids in understanding the scope of the effort a doctor has performed for their patients in the name of medical treatment.
Do wRVU Standards the same for all providers?
A doctor’s profession or area of specialty determines what the RVU requirements are for that particular doctor. For instance, the relative value units for doctors and surgeons who undertake difficult operations and tough surgeries, such as open-heart surgery or coronary artery bypass grafting, stay high (CABG). Due to the CABG case’s intricacy, the surgeon’s pay is thus relatively substantial.
The aforementioned case correlates the variations in relative value units based on the intensity of the process and the effective completion of the procedure rather than the number of operations a surgeon or healthcare practitioner has conducted. Also, it makes sense given that a dentist receives comparatively little RVU compensation compared to a surgeon conducting CABG.
Do the Values in wRVU vary Every Year?
One cannot estimate the monetary worth of the doctors’ labor by relative unit value. They serve as a symbol for the appropriate sum that should be paid to physicians in exchange for their services, for the use of their resources, and for the competence necessary to provide the requested service.
Only when the conversion factors (CF) have been applied to all accrued relevant value units will the amount for physicians in actual dollars be established. Congress modifies these units each year, thus their value might change from one year to the next.
What are the Crucial Components of wRVU calc for medical billing?
These elements should be taken into consideration when determining the precise units for important values:
|It establishes the RVUs for the level of effort, expertise, resources, and training required to carry out an operation. 53% of the entire unit value is made up of the RVU.
|This element defines the cost of the service, including that of the staff’s wages, equipment, rent, consulting services, supplies, and resources.
|It is dependent on what the healthcare provider is liable for spending. This portion of RVU is counted individually and accounts for 3% of the total.
The Geographic Practice Cost Index, or GPCI, will be multiplied by each component’s established value to confirm the cost of doing business across the jurisdiction.
|The formula for Finding the Number of HMOs and Medicare payable Reimbursements (in dollars):
Sum of all three components of wRVU ✖ Sum by CF
How to Measure RVUs in Medical Billing?
Dr. Phil Parker, the chief medical officer at SCP, stated in an interview that there are three ways to calculate a provider’s payment based on RVUs when determining how productive a physician is. These are:
- wRVU Calc per Hour
- wRVU Calc per Visit
- Cost per Hour
wRVU Calc per Hour
As stated, it is impossible to predict how much time a doctor will spend with a patient because it depends on how serious the situation is. Patients with complex procedural needs necessitate a high level of expertise and proficiency from a routine patient. At the end of the day, the doctor will eventually lead to a greater RVU.
Dr. Parker stated that the number of RVUs attributed relates directly to the CPT codes, and those relate to what’s on the chart. As a result, it’s important to include all pertinent information, such as the patient’s medical history, the findings of the physical examination, any decisions that were made, what the doctor did, how the patient responded, the crucial care that was provided, and the correct diagnosis.
Try to be specific and accurate as much as you can.
Additionally, he discussed the practical value of recording critical care together with the number of hours spent on a single patient. He advised that all those minutes are added up while calculating wRVU Calc per hour. Therefore, one needs to be diligent when recording the time.
wRVU Calc per Visit
It’s impossible to say how long a doctor spends with a patient in terms of hours. In light of the status of a patient before and after a procedure, the relative value units will therefore vary depending on the service. This implies that a physician will have more RVUs than a physician who sees fewer patients since he sees more patients in the allotted period. However, Dr. Phil asserts that’s not always the case.
Dr. Phil mentioned that a doctor seeing about two patients every hour in the emergency department is considered the standard. However, if the patients he encounters are in serious condition, he could only see one in an hour. According to the grade of his records, the provider might amass more RVUs than a doctor who sees more patients.
Along with this, emphasizes on swiftness and effectiveness of professional medical services as they will benefit the hospitals more. He coined the value of seeing more patients that increases RVUs rather than focusing solely on patients with high levels of acuity. The most effective strategy to create RVUs is by seeing lower acuity patients while seeing higher acuity patients can result in more RVUs.
Cost per Hour
Hospitals and healthcare organizations are concerned with controlling the provider’s salary per hour. Dr. Parker mentioned that providers get more financial benefits in a low-volume facility in contrast to any greater-volume facility.
He added that a provider’s cost per wRVU is what determines how financially efficient an ED is which means increased profitability is dependent on decreasing RVU generation costs. He gave the following illustration to support his findings.
Hospital A has physician coverage 24 hours a day and sees 48 patients each day (an average of 2.0 patients per hour), with a provider salary of $200 per hour. The same number of patients is covered by Hospital B, but it only sees 36 patients per day (an average of 1.5 patients per hour), with $180 per hour in provider compensation. Although Hospital B offers a lower overall salary, the doctor is compensated more per patient and hour of labor.
The method for Determining RVU
Now that you are aware of how to compute relative value units when you calculate RVUs based on hours or visits, you must consider those things;
- Total number of wRVU
- Geographic Practice Cost Indices (GPCIs), which are typically predetermined for RVU and its types, in their whole;
- Conversion factors (CF)
The formula for determining RVUs will resemble the following, under the specifications provided;
Total RVU is equal to the sum of the following:
(Work RVU * Work GPCI) + (Practice Cost RVU * Practice GPCI) + (Malpractice RVU * Malpractice GPCI)
The entire RVU value obtained from the formula is multiplied by the CF after calculating RVUs, and the result is the RVU’s dollar value.
What are the Pros & Cons associated with wRVU Calc?
The productivity and pay of a physician could be determined in several ways these days. One of the most common methods is the use of volume-based metrics, in which doctors are paid by the number of patients they see in an hour or the revenue they generate.
Maintaining physician compensation as part of the RVU process allows healthcare companies to encourage physicians to earn more while sharing the financial risk. In his explanation of this perk, Dr. Phil said, “For instance, let’s assume the hospital pays doctors $100 per hour, with 75% guaranteed and 25% connected to RVUs depending on acuity, volume, and the amount of effort the doctor puts in. The typical doctor would earn $100 per hour, but the exceptional ones would earn more.”
Smaller hospitals, which have a regular large variation in attendance and a relatively low patient turnover, frequently experience the drawbacks of RVUs. As Dr, Parker stated that if my RVU compensation is linked with the number of patients I serve or the number of services I provide then, attending 15 patients only in a smaller hospital throughout the day is of no benefit to me as compared to others attending more patients in their shift timing.
Moreover, he advised smaller organizations in these situations to hire doctors at a flat hourly fee or to scale back the qualities proportionally. For example, percentage characteristics should go from 25 to 10.
How to Achieve Optimal RVU Productivity?
According to Dr. Phil, there is a certain formula that must be followed to master RVU production;
- Calculating a coverage amount by the quantity and severity of the patients,
- Competitive doctor salaries to avoid workforce scarcity, and
- Reward medical professionals that achieve high RVUs
To the group of hospitals and organizations, he advised that;
“Know how you are doing in RVU-related metrics, right-size your medical coverage, evaluate charts for documentation possibilities, and drive up the volume by effectively lowering LWOTs.”
Hospitals must make sure that doctors can give the necessary patient care efficiently computing and calculating RVUs for the physicians and healthcare professionals. The more efficiently a doctor sees patients, renders services, and uses his time, the more wRVU calc he can produce and the more RVU compensation he will make. To successfully manage the RVU procedure, hospitals should adhere to Dr. Phil’s recommendations.