RVUs: Get new tricks out of this old dog

Before managed care became the driving force in medicine, physicians measured their productivity by how much they earned. "Today, however, capitation has undermined the basic link between reimbursement and productivity," says Beverly Donehoo, director of Banner Healthcare Solutions, a Fairfax, VA, consulting firm.

In a paper for the American College of Physicians-American Society of Internal Medicine in Washington, DC, Donehoo outlines a simple and reliable way to use relative value units (RVUs) instead of compensation to measure a physician's workload and productivity.

"You can not only use this for compensation and incentives, but to balance workloads, distribute capitation payments, perform benchmark comparisons against national standards, track the development of new physicians, assign overhead expenses, and do cost accounting," notes Donehoo.

"By tweaking a commonly used cost-accounting tool - the relative value unit [RVU] - every practice can quantify physician productivity," she says.

The foundation for this system is HCFA's Resource-Based Relative Value Scale (RBRVS). The RBRVS system posits that the resources expended in providing medical services are quantifiable as RVUs. These resources are divided into three different areas: physician work (wRVU), practice overhead expenses; and malpractice expenses or risk. For every procedure code in the Current Procedural Terminology (CPT) handbook, HCFA determines how many RVUs to assign to each of the three areas. The three RVUs for each code are added together to arrive at an aggregate RVU.

So how do you use this information? To measure physician productivity, you will only need the physician wRVUs - the component of the relative value scale that addresses the amount of time and training needed to render that particular medical service.

"If you already have billing software that tracks RVUs, you can list all the CPT codes billed during a given time period on a spreadsheet, along with the wRVU for each and the number of times or the frequency that you provided the service," says Donehoo.

To measure physician productivity using RVUs, simply perform these two functions:

1. Multiply the wRVU for each CPT code by the frequency of the service to obtain the total wRVUs for that code.

2. Add the total wRVUs for all the codes to obtain a grand total for each physician. (See chart on p. 148.)

When using these totals to compare productivity among physicians or against a benchmark, remember to use the same time periods for all your calculations. Alternatively, you can divide the grand total wRVUs by the number of months in the time period, yielding a wRVU per month figure. However, the time period should cover at least three months to ensure it represents typical productivity, Donehoo recommends.

Because many physician practice billing systems do not record RVUs, and the data-entry task of manually inputting RVUs for all CPT codes into a separate spreadsheet can be burdensome, you can further simplify this method by tracking only the specific CPT codes that account for the majority of services generally provided by the physicians in your practice. While less precise, this method is more cost-effective than tracking a long list of services only performed a few times a year, she notes. This information can then be used to create a simple spreadsheet using standard software to track work output for the codes most important to your practice.

Finally, if you provide a significant volume of subspecialty or other services not included in either chart, you can expand the list by adding the appropriate CPT codes and filling in the respective wRVUs as published in the Federal Register (see related story, below).