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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 from practicing physician surveys is provided to the RUC to help members assign an appropriate relative value to the service. 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 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. 

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 2012.  ACEP was part of a coalition that submitted the observation care codes 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. 

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 2014 CF was published in the Federal Register November 27, 2013 as $27.2006.  However, on December 26, 2013, President Obama signed a three month SGR patch that postponed the impending 20.1% cut through the end of March 2014.  The interim conversion factor was $35.8228, a 0.5 percent increase over the 2013 CF.  On April 1, 2014, the Protecting Access to Medicare Act based on H.R. 4302 was signed into law, which provided another patch to the SGR driven reductions. The CF will remain as $35.8228 through the end of the 2014. The law also extends the GPCI floor of 1.0 through March 2015 (see FAQ 6). 

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 2014 for Arizona:


[(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)(0.981) + (0.53)(0.988) + (0.21)(0.944) = 3.23 

(Total RVUs)  (Conversion Factor) = Medicare Payment  

(3.23 ) ($ 35.8228) =  $115.71  

 

FAQ 7:  What are the Medicare assigned RVUs for ED related E/M services in 2014? 

 

 Emergency E/M RVUs in the 2014 Final Rule 

Code

Description

2013 Work RVUs

2014 Work RVUs

2013 Facility PE RVUs

2014 Facility PE RVUs

2013 Mal-Practice RVUs2

2014 Mal-Practice RVUs2

2013 Total RVUs

2014 Total RVUs

Difference in % from 2013-2014

99281

ED visit, level 1

0.45

0.45

0.12

0.11

0.03

0.03

0.60

0.59

-2%

99282

ED visit, level 2

0.88

0.88

0.23

0.21

0.07

0.07

1.18

1.16

-2%

99283

ED visit, level 3

1.34

1.34

0.32

0.29

0.10

0.10

1.76

1.73

-2%

99284

ED visit, level 4

2.56

2.56

0.58

0.53

0.22

0.21

3.36

3.30

-2%

99285

ED visit, level 5

3.80

3.80

0.83

0.76

0.30

0.29

4.93

4.85

-2%

99291

Critical Care

1st hour

4.50

4.50

1.56

1.44

0.34

0.33

6.40

6.27

-2%

99292

Critical Care add'l 30 min

2.25

2.25

0.79

0.72

0.18

0.17

3.22

3.14

-3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Code 

Description 

2013 Work RVUs 

2014 Work RVUs 

2013 Facility PE RVUs 

2014 Facility PE RVUs 

2013 Mal-Practice RVUs2 

2014 Mal-Practice RVUs2 

2013 Total RVUs 

2014 Total RVUs 

 

Difference in % from 2013-2014 

99281 

ED visit, level 1 

0.45 

0.45 

0.12 

0.11 

0.03 

0.03 

0.60 

0.59 

-2% 

99282 

ED visit, level 2 

0.88 

0.88 

0.23 

0.21 

0.07 

0.07 

1.18 

1.16 

-2% 

99283 

ED visit, level 3 

1.34 

1.34 

0.32 

0.29 

0.10 

0.10 

1.76 

1.73 

-2% 

99284 

ED visit, level 4 

2.56 

2.56 

0.58 

0.53 

0.22 

0.21 

3.36 

3.30 

-2% 

99285 

ED visit, level 5 

3.80 

3.80 

0.83 

0.76 

0.30 

0.29 

4.93 

4.85 

-2% 

99291 

Critical Care 

1st hour 

4.50 

4.50 

1.56 

1.44 

0.34 

0.33 

6.40 

6.27 

-2% 

99292 

Critical Care add’l 30 min 

2.25 

2.25 

0.79 

0.72 

0.18 

0.17 

3.22 

3.14 

-3% 

  

The relative value units for the ED E/M codes dropped slightly, by about 2% across the board because of decreases in the facility practice expense and professional liability insurance values. The work values did not change for 2014. However, the projected impact for Medicare payments to emergency physicians is to increase by 2%. This seems paradoxical to have a 2% decrease in our E/M codes, RVUs, the source of at least 80% of revenue, yet still be projected for a 3% overall increase in payments.

The reason for the apparent paradox is rescaling of the weights of the three components of the RBRVS equation, work, practice expense and professional liability insurance RVUs, due to the Medicare Economic Index (MEI). In 2014, the weighting is more heavily on work RVUs. Because emergency medicine has a very high percentage of work to total RVUs, we benefit from that shift. So even though our RVUs dropped slightly because of decreases in practice expense and PLI values, our work values stayed the same and with greater weighting on that component, we will actually see an increase instead of a loss. 

FAQ 8.  What about the Sequester cuts for 2014? 

The sequester cuts of two percent, which started for dates of service after April 1, 2013, remain in place for 2014. The reductions will show up on the EOB form as adjustment code 223 (Adjustment code for mandated federal, state or local law/regulation that is not already covered by another code and is mandated before a new code can be created). 

Last Updated 06/2014 

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