Work RVUs
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11/19/2018 at 3:30:31 PM GMT
Posts: 3
Work RVUs

How to determine your worth


Mid level providers need to calculate the actual value they bring to their practice.  With reimbursements down and global/bundling of services and care, you need to stay ahead of the game in order to maintain your employment.  Most of us have worked long hours with tiring call duties only to have our managers question our actual contribution to the hospital or practice.  I remember some of my practice managers telling me that I barely make my salary.  These comments make us question our job security and may even lead to unnecessary stress and anxiety.   Everyone wants to be appreciated and feel that they bring something to the table for their employer.  If we have the knowledge necessary to educate our employers and practice managers on our true worth, we can only make our future brighter.  Knowledge will also make us more aware of thing we need to do to make the change toward improvement.

When we speak of a measuring tool to give us a representative value to our efforts the RVU (relative value unit) is the standard.  Using reimbursements can be unreliable because negotiations with insurance carriers can leave you short or underpaid.  An RVU is an absolute number assigned to a measurable level of service and the procedures you perform.  It is not unlike when you go to the mechanic and find you need a brake replacement.  They determined that this particular service has an assigned number of hours to complete the task.  If your brake job takes 3 hours you will be charged for 3 hours even if the mechanic completes the task in 2 hours.  This is an acceptable norm.  If you see a follow up or established patient and you determine that the visit was a level 3, you are awarded 0.97 RVUs.  This too is an acceptable norm.  These RVUs have a monetary value just as the mechanic charges $75 an hour for his services, you get a specific amount of money per RVU.  The value of the RVU changes for region and payor but most dollar amounts are comparable.

An RVU contains 3 subsets.  We need to look at the cost of our employment when evaluating RVUs.  46% of our RVU is fractioned out as overhead.  This covers practice overhead, the cost of our office staff, computers, etc.  There is another 4% that covers malpractice insurance fees.  This essentially leaves about 50% of the revenues free and clear of overhead.  If you have access to your region’s RVU dollar amount you can calculate your actual work with your annually generated RVUs.  I have found that work RVUs compensate between $30 and $40 so I will round off to $35 for this example.  Work RVU compensation already corrects for overhead and malpractice RVUs. 

Let’s say you work in an orthopedic clinic and see about 20 patients a day and work 5 days a week. For simplicity we will say you average a 99213 visit, a basic follow up. For a 99213 you would get 0.97 RVUs. If you see 20 patients per day multiplied by 5 days in a week that would equate to 100 patients a week. Multiple this by 47 weeks (52 weeks in a year minus 4 weeks for vacation and 1 for CME to attend the PAOS Annual Conference) and you would have seen 4700 patient visits in a year. To calculate total work RVU for the year you would multiply your visits by .97 RVU and you would be generating 4,559 work RVUs per year. 

Assume your base salary is $120,000 a year or $30,000 a quarter.  Profit is not appreciated until you have reached your base salary, $30,000 divided by $35 (average value of a work RVU) would be about 857 RVUs per quarter to make salary.   Your calculated annual patient encounters gave you 4,559 work RVUs per year or 1,139 per quarter.  You have earned about 282 work RVUs over the cost to meet your salary in this particular scenario.  This would essentially leave $9,896.25 on the table up for negotiation per quarter.  Remember this work RVU already subtracts off the cost of overhead and is pure profit.  Although most practices are in business for a profit, some of the hard work you do should be rewarded back to you as well.

I am sure most of us can produce more than 4700 work RVUs.  Sullivan and Cotter a well-known firm that performs annual salary evaluations, determined that the annual work RVUs for a mid level practitioner in orthopedics is about 3596.  Some practices use this to develop a duel tier system of reimbursement.  They pay a smaller amount up to a certain number of RVUs and then increase the amount per RVU stimulating increased productivity.   The purpose of this post was to get you thinking of what you bring to the practice and making appropriate changes to make your life better.

Paul Desillier, MPAS, PA-C

Past President