Understanding RVUs is Critical to Offsetting Declining Reimbursement
Reimbursement is directly tied to the RVU system as a benchmark for measuring productivity
While most radiologists bill patients through Relative Value Units (RVU), many do not understand the metric that determines payment for imaging studies and radiologic procedures, according to one radiologist who spoke on the topic at RSNA 2015.
“It is estimated that radiologists have lost approximately $1.2 billion in payments between 2006 and 2013, partially due to adjustments to the RVU system,” said Yuri Peterkin, M.D., a third-year radiology resident at Winthrop-University Hospital, in Mineola, New York, who has authored numerous articles on radiology reimbursement. “Radiologists need to understand the RVU system and reimbursement process in order to advocate for their specialty.”
“Radiologists know about RVUs, but many don’t know how RVUs are determined or how they are getting paid through this system,” Dr. Peterkin said. “Even salaried radiologists should know how their services are billed because radiology reimbursements have not been keeping up with radiologists’ productivity.”
Congress created the RVU system in 1989 to standardize Medicare and Medicaid payments. Before the RVU system, payments were based on a legal standard of a “usual, customary and reasonable rate,” which left a wide range of payments for similar procedures, Dr. Peterkin said.
RVUs are a measure of physician output based on the value assigned to each Current Procedural Terminology (CPT) code through the resource-based relative value scale used partially by Medicare and nearly all health maintenance organizations.
The Centers for Medicare and Medicaid Services (CMS) assigns an RVU to each procedure as a basis for billing. That number can be adjusted for various factors, but ultimately is multiplied by a dollar amount set by Congress to generate physician billing amounts.
CMS sets RVUs annually based on the recommendation of the American Medical Association’s Relative Value Scale Update Committee (RUC), which is comprised of a panel of 30 doctors, including representatives from the major medical specialties. One radiologist member and one radiologist as an alternate are selected by the American College of Radiology (ACR) to represent radiology on the committee.
Benchmarks for Measuring Productivity
Over the years, the RVU system has generated controversy for what some perceive as the system’s undervaluing of radiology productivity.
Medicare payment for most radiology services includes both the RVU professional component, which accounts for the radiologist’s time and expertise, and the RVU technical components, which accounts for equipment and facilities, for the procedure code that is billed.
In an effort to improve efficiencies, CMS implemented a Multiple Procedure Payment Reduction (MPPR) in 2006, reducing the technical component by 25 percent for contiguous body part advanced imaging examinations performed on the same patient on the same day. After the Affordable Care Act was passed in 2010, the technical component was reduced by an additional 25 percent. In 2011, CMS changed the MPPR to include non-contiguous body parts across different modalities. MPPR was expanded in 2012 to include a cut to the professional component as well.
“Radiologists spend the same amount of time creating a report for the examination, so to cut any part of the professional component can get controversial from the radiologists’ standpoint,” Dr. Peterkin said.
The primary justification offered by CMS for these cuts focused on the pursuit of efficiencies, or reducing overlapping and duplicative work, within the technical and professional components on imaging examinations which—when performed together—are not repeated.
Another mechanism that lowers reimbursements is “code bundling” in which the technical and professional component for a set of procedures is reduced when those procedures are performed at the same time, Dr. Peterkin said. This reduction is most prominently seen in mammography where it was determined that 75 percent of breast intervention codes were reported together. In 2014, CMS restructured all codes into 14 new bundles, resulting in a 14 percent cut in the professional component and a 17 percent cut in the technical component.
Other challenges will arise as radiologists transition from a fee-for-service model to a pay-for-performance model under the Medicare Access and CHIP (Children's Health Insurance Program) Reauthorization Act of 2015 (MACRA). Under MACRA, physicians will see first a stabilization of their Medicare payments followed by an accelerated transition to value-based payments in 2018.
Understanding how to use RVUs to develop a pay-for-performance model will be critical, Dr. Peterkin said. He urges radiologists to embrace awareness and action as the best antidote to offsetting the reimbursement decline.
“Radiologists need to be aware and understand the RVU system, which will help them better understand their current productivity and reimbursement and give them guidance for navigating future reimbursement changes,” Dr. Peterkin said. “Radiologists also need to be vocal and advocate for their specialty.”