RBRVS FAQ

FAQ 1:  What is the history of our current RBRVS System?

In 1988, the Centers for Medicare and Medicaid Services (CMS), funded a study by William C. Hsiao from the Harvard School of Public Health that evaluated the resources and costs associated with delivery of physician services. The results of this study led to the introduction in 1992 of the Resource-based Relative Value Scale (RBRVS), which is a system for describing, quantifying, and reimbursing physician services relative to one another. The RBRVS incorporates three components of physician services - physician work, practice expense, and professional liability insurance (PLI).

A relative value unit (RVU) is assigned to each of the work, practice expense and PLI (aka Malpractice) components. The RBRVS system uses the definitions and procedure codes developed by the American Medical Association in their Current Procedural Terminology (CPT). This coding system is currently used by Medicare, Medicaid and many private payers to reimburse physician services.

 
FAQ 2:  What is an RVU?

An RVU is an abbreviation for Relative Value Unit. Physician services are reported using the Current Procedural Terminology (CPT) coding system. For each CPT code, each of the three components of physician work (see #1 above) is assigned an RVU and the sum is the total RVU for that CPT code. For example: Work RVU + practice expense RVU + professional liability insurance RVU = Total RVU. The total RVU is multiplied by the conversion factor to obtain the reimbursement for that CPT code.

 
FAQ 3:  How are the RVU’s assigned to medical services determined?

When a new code is approved through the CPT process, it is sent to the American Medical Association (AMA) Relative Value Update Committee (RUC) for valuation. Data is provided to the RUC to help members assign an appropriate relative value to the service. This process is budget neutral requiring that for every additional dollar allocated to a given service there is a dollar less for those who do not use a given code. This is a difficult process requiring the consideration of the interests of many stakeholders. The RUC then forwards their recommendations to CMS which historically has adopted those recommendations over 90% of the time.

 
FAQ 4:  What is the process for revisiting the values of the RVU’s assigned to each code?

CMS is required by statute to review the valuation of codes every five years. This process begins with interested parties submitting for review specific codes which they believe are inappropriately valued. Groups supporting these changes must provide compelling evidence for the changes they seek. This is usually done using survey data of providers who use the codes to be revalued. The last five year review for Emergency Department Evaluation and Management codes occurred in 2007.  ACEP submitted the Emergency Department Evaluation and Management (E/M) codes and Critical Care for reconsideration.  When a five year review affects codes utilized by Emergency Medicine, ACEP sends a detailed survey to members asking them to describe the work involved with specific codes and compare the Emergency Department E/M codes with other codes. This data is subsequently used to develop recommendations toward revising a code value. The RUC reviews the data and submits its recommendations to CMS for appropriate action.

Observation services were among the codes studied during a recent five year review.  Effective January 1, 2012, both Initial (99218-99220) and Subsequent (99224-99226) Observation codes received substantial increases for work RVU.  CPR (92950) and Complicated I&D (10061) also benefited from work and PE RVU revisions, respectively: 

 

CPT Code

2011 Work RVU

2012 Work RVU

2011 Total RVUs

2012 Total RVUs

RVU Increase

99218

1.28

1.92

1.89

2.77

46.6%

99219

2.14

2.60

3.16

3.81

20.6%

99220

2.99

3.56

4.42

5.23

18.3%

99224

0.54

0.76

0.82

1.14

39.0%

99225

0.96

1.39

1.45

2.06

42.0%

99226

1.44

2.00

2.17

2.96

36.4%

92950

3.79

4.00

5.14

5.39

4.9%

10061

2.45

2.45

4.68

5.09

8.8%

 

 
FAQ 5:  What is the Medicare Conversion Factor?

The Conversion Factor (CF) is the dollar amount by which each CPT codes total RVU value is multiplied to obtain the reimbursement for a given service. A change in the CF impacts all CPT codes proportionally. The CF is updated annually by CMS. It is calculated by estimating the sustainable growth rate (SGR) which is the target rate of growth in spending for physician services. The conversion factor is then calculated based on legislative budget requirements and the need to align actual spending with the target provided by the SGR. Annual legislative fixes have averted a variety of steep payment cuts but a major goal of ACEP and organized medicine is to replace the SGR with a more appropriate measure for updating physician payment.  The 2012 CF is currently $24.6712, as published in the Federal Register November 28, 2011.  However, the CF will likely be adjusted higher by legislative action to offset the current 27.4% physician reduction for 2012.

On December 22, 2011, Congress passed a two month SGR patch that postponed the impending cut.  The interim conversion factor is $34.0376, a slight increase over the 2011 CF because of budget neutrality adjustments.  A longer term solution will be considered when Congress reconvenes in early 2012.

 
FAQ 6:  How is Medicare reimbursement determined?

The reimbursement for a given CPT code is determined by taking the total RVU’s for the service and multiplying by the conversion factor. In addition, a geographic adjustment factor (GAF) known as the Geographic Practice Cost Index (GPCI) is applied to account  for locality cost differences for work, practice expense and liability coverage (aka Malpractice) around the nation. An example is given below for E/M code 99284 in 2012 for Kenosha WI:
 
[(Work RVU X Work GPCI) + (Practice Expense RVU X PE GPCI)  + (PLI or Malpractice) RVU X PLI GPCI)] = Total RVU X Conversion Factor = Medicare payment

(2.56)(1.009) + (0.59)(1.025) + (0.22)(0.542) = 3.31

(Total RVUs)  (Conversion Factor) = Medicare Payment

( 3.31) ($24.6712) =  $81.66 

FAQ 7:  What are the Medicare assigned RVUs for ED related E/M services in 2012?

Emergency E/M RVUs in the 2012 Final Rule

 CPT Code 

2011 Work RVUs

2012 Work RVUs

2011 Facility PE RVU

*2012
Facility PE RUV

2011-2012 Malpractice (PLI) RVU

2011 Total RVUs

2012 Total RVUs

99281

0.45

0.45

0.13

0.12

0.03

0.61

0.60

99282

0.88

0.88

0.24

0.23

0.07

1.19

1.18

99283

1.34

1.34

0.36

0.33

0.10

1.80

1.77

99284

2.56

2.56

0.62

0.59

0.22

3.40

3.37

99285

3.80

3.80

0.88

0.84

0.30

4.98

4.94

99291

4.50

4.50

1.56

1.54

0.34

6.40

6.38

*2012 Transitional Facility PE values (75:25) reflect Year 3 of a 4-year phase-in determined by use of the PPIS survey data through which ACEP actively participated.  

The 2012 Conversion Factor (CF) is currently scheduled to be $24.6712- effective January 1, 2012.  This represents a 27.4% reduction from the final 2011 CF.  On December 22, 2011, Congress passed a two month SGR patch that postponed the impending cut.  The interim conversion factor is $34.0376, a slight increase over the 2011 CF because of budget neutrality adjustments.  A longer term solution will be considered when Congress reconvenes in early 2012.

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