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 professional liability insurance (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 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 is a dollar less for those who do not use that 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 specific codes for review, 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 suggested to be revalued. 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. It was historically calculated by estimating the sustainable growth rate (SGR) which is the target rate of growth in spending for physician services; however, the SGR formula was repealed in 2015 with passage of the Medicare Access and CHIP Reauthorization Act. For 2016, the Medicare conversion factor is $35.8279.

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 2016 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) ($ 35.8279) = $117.87


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

  Emergency E/M RVUs in the 2016 Final Rule   

Code

Description

2015 Work RVUs

2016 Work RVUs

2015 Facility PE RVUs

2016 Facility PE RVUs

2015 Mal-Practice RVUs2

2016 Mal-Practice RVUs2

2015 Total RVUs

2016 Total RVUs

Difference in % from 2015-2016

99281

ED visit, level 1

0.45

0.45

0.11

0.11

0.03

0.03

0.59

0.59

0%

99282

ED visit, level 2

0.88

0.88

0.23

0.21

0.07

0.07

1.16

1.16

0%

99283

ED visit, level 3

1.34

1.34

0.32

0.29

0.10

0.12

1.73

1.75

1%

99284

ED visit, level 4

2.56

2.56

0.53

0.53

0.21

0.24

3.30

3.33

1%

99285

ED visit, level 5

3.80

3.80

0.76

0.75

0.29

0.38

4.85

4.93

2%

99291

Critical Care 1st hour

4.50

4.50

1.44

1.43

0.33

0.40

6.27

6.33

1%

99292

Critical Care add'l 30 min

2.25

2.25

0.72

0.72

0.17

0.19

3.14

3.16

1%

 

The relative value units for the ED E/M codes were mostly unchanged. The work values did not change for 2016 and only one minor change in the PE RVUs. The professional liability insurance values increased slightly for the lower level ED codes and decreased slightly for the higher level ED codes and critical care.

FAQ 8.  What about the Sequester cuts for 2016? 
The sequester cuts of two percent, which started for dates of service after April 1, 2013, remain in place for 2016. 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).  

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, CAE, Reimbursement Director, ACEP at (972) 550-0911, Ext. 3233 or dmckenzie@acep.org.

Updated 01/11/2016

 

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