RVU Calculator

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Since 2001, PCC has examined the price schedules of hundreds of pediatricians from around the country. What we have discovered shocks us: The overwelming majority of private pediatricians significantly undercharge for their services. Worse, the 'systems' they use to determine their prices are not the least bit rational.

Although changing your prices to reflect the true value of your work will not likely lead to a dollar-for-dollar increase in your revenue, it will noticeably improve your bottom line. Or, as one client described their price changes: "it allowed us to add a doctor, to decrease call, and move to a new office." For a great story about using RVUs to increase revenue, check out a PCC client success story, Let RBRVU Fees Turn Sense into Dollars from PCC's Partner Network newsletter. You can also stay in touch with the many changes and updates to pediatric RVUs on Chip's Blog.

So, if you want to get your pediatric RVU data, skip ahead to the calculator, or review some basic facts below before continuing. (You must allow popups!)

RBRVS: What it is and why it's important

One of the most common codes in Pediatric practice is 99213, the medium level office visit. Practices charge a wide range of fees for this code, from as little as $30 to as much as $100. When you consider the prices you charge, can you explain why you have set them?

If you are like many private practice physicians, you arrived at your fees by trial and error or—worse and more likely—by accident. Some common explanations: "It's a little more than what they charge across town"; "It's what our consultant told us to charge"; "It's the most my biggest payor would pay"; or "We pulled some numbers out of a hat."

There's a better way to set your prices. One that reflects the value of your work. One which the majority of insurance companies use as a guideline in their reimbursement schemes. One that makes it very easy for them to adjust your prices each year. (And the insurance companies that don't, avoid it specifically because they know it will cost them money!)

It's called the Resource Based Relative Value System— RBRVS, or RVU (Relative Value Units) for short. And, best of all, it's free. The sooner you take advantage of RVUs in your practice, the sooner you will get paid fairly.

Background

During 2001, Medicare spent nearly $400 billion, nearly 20% of all health care dollars spent in the United States.

Medicare is the biggest fish in an enormous pond. And managing the money paid by Medicare is a difficult process. There are many laws, many sources begging for "fair reimbursement," and many different means of accounting for it all. To make reimbursement more fair and accurate, Medicare decided to adopt a new payment system in 1992. This new payment system relies on RBRVUs or the relative "value" of the work being performed on a procedure basis.

The concept is fairly simple. Every one of the thousands of medical procedure codes receives a "score" based on the relative time, skill, expense, and liability potential of the procedure. Something like a "Percutaneous transluminal coronary balloon angioplasty; single vessel" (92982) gets 21.36 Resource Based Relative Value Units, or RVUs, while an "Office or other outpatient visit for the evaluation and management of an established patient..." (99213) gets 1.29 RVUs. As a result, a 92982 is "worth" about 16x more than a 99213 (21.36/1.29).

Once Medicare completed the tedious task of coming up with scores for each of the procedures, they assigned a dollar figure to each RVU point and came up with a fee schedule. Medicare then adjusted the RVUs for the location of the practice. Each state, and many municipalities, have special RVU multipliers based on the expense of providing services in that area.

Update: Medicare now has it's own calculator.

What do RVUs have to do with Pediatricians ?

Obviously, if your practice sees Medicare patients, knowing your RVU values will ensure that you receive the proper reimbursement from Medicare. What about reimbursement regarding the remaining 80% of the health care dollars being spent this year? Or, what about Pediatricians, who do not see Medicare patients?

The majority of private insurance companies use some form of the RVU process to determine their fee schedules. Most insurers simply differ with their adjustment figures or use some multiplier of the standard RVU. Coding and reimbursement experts indicate that RVU analysis is an excellent way to track your reimbursement for non-Medicare payors. Ask your payors how they calculate their fee schedules and work accordingly. Many insurance contracts require them to provide this information to you on request. Not surprisingly, some payors are good about complying while others are not.

Although there is no official level at which you should charge for your procedures, experts have suggested that 25-30% more than the Medicare rate is what "you should try to get." (Pediatric Coding Alert, November 2002, page 84). In fact, other specialties often charge 50-400% more than the Medicare rate. PCC's research shows that private practice Pediatricians charge only 25-40% more than Medicare, on average. In a nutshell, however, the goal of any successful business should always be to receive more than it is receiving now!

For example, if you use a multiplier of 150% of Medicare, you should charge between approximately $65 and $100 for a 99213, depending on where you practice. If your practice performed 10,000 99213s at $59 last year (an average practice) and your fee should have been $70, you've reduced your income/revenue by $110,000.

According to Medicare's suggested rates for well visits, you should charge between $102 and $170 for a 99392. Some Pediatricians currently charge less than $60 and a majority still charges less than $100. In practical terms, if your practice performed 1,200 99392s last year and charged $85 each (vs. $120), that's $42,000 you've left on the table for just 1-4 Year Old Well Visits. PCC has worked to help practices who have undercharged hundreds of thousands of dollars, each year, on physicals alone.

There's another important reason to set your prices using the RVU system: It's consistent, logical, and supportable. When questioned about your pricing, you'll have a substantive process that you can describe and trust. Right now, most practices have pricing that looks like this:

When you really want it to look like this:

One important note: Medicare does not provide RVU values for all the procedures Pediatric practices use. Events like well visits for patients under the age of 18, immunizations, or many lab tests aren't part of the standard RVU calculations. As a result, Pediatricians depend on coding experts to calculate these "gap" codes. Fortunately, the AAP publishes their expected values for the most important Pediatric codes (along with good instructions).

OK, I understand. Now what do I do?

Many Pediatricians would like to enter a few figures into a spreadsheet to learn exactly what to charge for each procedure. Unfortunately, it's not that easy. Calculating the recommended fee for each procedure is a multi-step process. Fortunately, we've done all the hard work for you. You can use our online calculator to figure out the rates that you should charge for each procedure.
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