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Relative Value Unit (RVU)

What is a relative value unit?

A relative value unit (RVU) is a component of the Resource-Based Relative Value Scale (RBRVS), which the Centers for Medicare and Medicaid Services (CMS) and private payors use to determine the payment amount for physicians.

An RVU defines the value of a service or procedure when compared to all services and procedures. Some factors that weigh into the RVU include clinical and nonclinical resources, the extent of the physician’s work, and the expertise required to deliver the healthcare service to the patient.

Under the RBRVS, the following factors determine a physician’s financial compensation:

  • Total RVUs
  • Conversion Factor (CF)
  • Geographic Practice Cost Indices (GPCIs)

In this way, the RVU partially impacts the monetary compensation physicians receive when enrolled in values-based programs.

There are three types of RVUs, which allow the RVU to accurately capture the time, effort, and money requirements of providing a service to a patient:

  1. Practice Expense (PE) RVUs
  2. Malpractice (MP) RVUs
  3. Work RVUs

How do RVUs improve healthcare?

RVUs act as a metric of the value a service or procedure offers, which then factors into the physician’s compensation, incentivizing healthcare providers to deliver higher-quality care to receive a higher compensation.