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RVUs: A valuable tool for aiding practice management


When it comes to managing practice finances, physicians have few better tools at their disposal than the Relative Value Unit (RVU). RVUs can be used for everything from helping to determine compensation in a multi-physician practice to deciding whether to take a buyout offer from a hospital system.

relative value unit based productivityWhat are RVUs?

RVUs are part of the system Medicare uses to decide how much it will reimburse physicians for each of the 9,000-plus services and procedures covered under its Physician Fee Schedule, and which are assigned current procedural terminology (CPT) code numbers. The dollar amount for each service is determined by three components: physician’s work, practice expenses, and malpractice insurance.

(Physician’s work, in turn, is divided into four subcomponents: the time it takes to perform the service, the technical skill and/or physical effort required to perform the service, the amount of mental effort and judgment required, and the stress arising from any potential risk to the patient from performing the service.)

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