Understanding Medical RVUs
Relative Value Units (RVUs) are the cornerstone of the Medicare fee schedule, used to determine how much doctors and medical facilities are paid for their services. Our RVU Calculator makes it simple to estimate reimbursement for specific procedures or project physician compensation based on wRVU productivity.
The Medicare Payment Formula
Medicare calculates final payment by multiplying the adjusted RVU by a standard Conversion Factor (CF). The total RVU is made up of three components, each adjusted by a Geographic Practice Cost Index (GPCI) to account for regional cost of living differences.
Total RVU Formula:
(Work RVU × Work GPCI) +
(Practice Expense RVU × PE GPCI) +
(Malpractice RVU × MP GPCI)
The resulting Total RVU is then multiplied by the Conversion Factor to yield the final dollar amount. Learn more about the Relative Value Unit system on Wikipedia.
wRVUs and Physician Compensation
While total RVUs dictate what the practice is paid, Work RVUs (wRVUs) reflect the physician's specific time, skill, and effort.
Many physician employment contracts use a productivity-based model:
- Base Salary: A guaranteed income covering a specific threshold of wRVUs.
- Bonus Rate: A dollar amount paid for every wRVU generated above the threshold.
Using our wRVU Salary Target tab, physicians can easily calculate the exact number of procedures (wRVUs) they need to perform to achieve their desired financial goals.