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RBRVS FAQ

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 (PE) and professional liability insurance (aka malpractice) (PLI) 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.

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 service (physician work, practice expense, and professional liability insurance) is assigned an RVU. 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.

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 Scale Update Committee (RUC) for valuation. ACEP has members as representatives on this committee to advocate for emergency medicine’s interests.  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 its recommendations to CMS which accepts or rejects that value. This process is budget neutral requiring that for every additional dollar allocated to a given service, there must be a dollar equivalent reduction in the reimbursement of other services.

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 specific codes for review, which they believe are inappropriately valued. Groups supporting these changes must provide compelling evidence for the changes they seek. ACEP’s representatives participate in this process.  When codes reported by emergency medicine are identified for reconsideration, ACEP sends a detailed survey to randomly selected members, asking them to describe the work defined by intensity over time, involved with specific codes under review by comparing them with other codes whose relative values are known and widely considered to be accurate. 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. The last RUC review for emergency department evaluation and management codes occurred in April 2018 for the 2020 Medicare Physician Fee Schedule.

What is the Medicare Conversion Factor?

The Conversion Factor (CF) is the dollar amount by which each CPT code’s total RVU value is multiplied to obtain the payment for a given service. A change in the CF impacts all CPT codes proportionally. The CF is updated annually by CMS. The conversion factor for 2022 is $33.5848. However, it is possible that Congress will step in to provide funding to offset  the 3.75% cut driven by a budget neutrality adjustment to offset increased payment for office and other outpatient code increase, which began in 2021.

Following formal publication of the 2022 Physician Final Rule, Congress passed the Protecting Medicare and American Farmers from Sequester Cuts Act, yielding a 3 percent increase to the previously finalized conversion factor for a one-year fix only. So, the final conversion factor for 2022 is $34.6062

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 2022 furnished in New Hampshire:

 

[(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 

(2.74) (1.000) + (0.54) (1.038) + (0.28) (0.917) = 3.56

(Total RVUs)  (Conversion Factor) = Medicare Payment  

(3.56) ($34.6062) = $ 123.20

What are the Medicare assigned RVUs for ED related E/M services in 2022?

For 2022, the relative value units for the ED E/M codes were mostly unchanged.

Code Description

Work RVU

PE
RVU

MP RVU 2021 Total RVUs
99281 Emer. dept. visit 0.48 0.11 0.05 0.64
99282 Emer. dept. visit 0.93 0.21 0.09 1.24
99283 Emer. dept. visit 1.60 0.33 0.13 2.09
99284 Emer. dept. visit 2.74 0.54 0.27 3.38
99285 Emer. dept. visit 4.00 0.74 0.42 5.16
99291

Critical care 1st hour

4.50 1.43 0.43 6.33

99292

Critical care add’l 30 min 2.25 0.72 0.21 3.18

 

What about the sequester cuts for 2022?

The 2 percent Medicare sequester cuts that started for dates of service after April 1, 2013 are set to go back into place on January 1, 2022 after being temporarily halted during the COVID-19 public health emergency. 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).  Medicare is adding an additional 4 percent sequester beginning in 2022 to offset the significant projected increase to the deficit caused by the American Rescue Plan as part of a “pay as you go” budget neutrality reduction. Congress may act to eliminate part or all of the upcoming sequester cuts.  It is more likely that Congress will act on the 4 percent “Pay-Go” sequester rather than the ongoing 2 percent sequester, since the latter sequester is set to continue until 2030.

Following formal publication of the 2022 Physician Final Rule, Congress passed the Protecting Medicare and American Farmers from Sequester Cuts Act, yielding a 3 percent increase to the previously finalized conversion factor for a one-year fix only. So, the final conversion factor for 2022 is $34.6062

Updated December 2021

Disclaimer

The American College of Emergency Physicians (ACEP) has developed the Reimbursement & Coding FAQs and Pearls for informational purposes only.   The FAQs and Pearls have been developed by sources knowledgeable in their fields, reviewed by a committee, and are intended to describe current coding practice. However, ACEP cannot guarantee that the information contained in the FAQs and Pearls is in every respect accurate, complete, or up to date.

The FAQs and Pearls are provided "as is" without warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability and fitness for a particular purpose. Payment policies can vary from payer to payer. ACEP, its committee members, authors or editors assume no responsibility for, and expressly disclaim liability for, damages of any kind arising out of or relating to any use, non-use, interpretation of, or reliance on information contained or not contained in the FAQs and Pearls. In no event shall ACEP be liable for direct, indirect, special, incidental, or consequential damages arising out of the use of such information or material. Specific coding or payment related issues should be directed to the payer.

For information about this FAQ/Pearl, or to provide feedback, please contact David A. McKenzie, ACEP Reimbursement Director at (469) 499-0133 or dmckenzie@acep.org.

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