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 (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. 

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 (physician work, practice expense, and professional liability insurance) 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 Scale Update Committee (RUC) for valuation. ACEP has members as representatives on this committee to advocate for our 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.

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 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.  This is usually done using survey data of providers who use the codes suggested to be revalued. Our members are asked to participate in this process and we generally see a god response from members. The last five-year review for Emergency Department Evaluation and Management codes occurred in 2007.  ACEP was also part of a coalition that submitted the observation care codes for reconsideration in 2012.  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 used in the Emergency Department 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 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 2017 is $35.8887.

 

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 2017 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) (1.000) + (0.53) (1.000) + (0.23) (0.877) = 3.29

(Total RVUs)  (Conversion Factor) = Medicare Payment  

(3.29) ($35.8887) = $118.07

 

FAQ 7:  What are the Medicare assigned RVUs for ED related E/M services in 2016? 

 

 Emergency E/M RVUs in the 2017 Final Rule 

Code

Description

 

2017 Work RVUs

2016 Work RVUs

 

2017

Facility PE RVUs

2016 Facility PE RVUs

2017 Mal-Practice RVUs2

 

2016 Mal-Practice RVUs2

 

2017 Total RVUs

2016 Total RVUs

 

Difference in % from 2015-2016

99281

ED visit, level 1

0.45

0.45

0.11

0.11

0.04

0.04

0.60

0.60

0%

99282

ED visit, level 2

0.88

0.88

0.21

0.21

0.08

0.08

1.17

1.17

0%

99283

ED visit, level 3

1.34

1.34

0.29

0.29

0.12

0.12

1.75

1.75

0%

99284

ED visit, level 4

2.56

2.56

0.53

0.53

0.23

0.23

3.32

3.32

0%

99285

ED visit, level 5

3.80

3.80

0.75

0.75

0.35

0.35

4.90

4.90

0%

99291

Critical Care

1st hour

4.50

4.50

1.43

1.42

0.39

0.39

6.32

6.31

0%

99292

Critical Care add’l 30 min

2.25

2.25

0.72

0.72

0.20

0.19

3.17

3.16

0%

 

The relative value units for the ED E/M codes were mostly unchanged.

 

FAQ 8.  What about the Sequester cuts for 2017? 

The sequester cuts of two percent, which started for dates of service after April 1, 2013, remain in place for 2017. 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 12/2016

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