RVU Analysis

RVUs, or Relative Value Units, are non-monetary units used to quantify the relative value of medical services. RVUs are part of the Resource-Based Relative Value Scale (RBRVS). The RBRVS is a reimbursement methodology developed by the Centers for Medicare & Medicaid Services (CMS) to help determine reimbursement rates for medical services.

Healthcare organizations commonly use an RVU analysis to evaluate:

• Provider productivity
• Compensation alignment
• Reimbursement trends
• Payer mix performance
• Operational efficiency
• Bonus and incentive opportunities

This article examines how RVUs can be used to measure provider productivity, provider costs, reimbursements, and bonuses.

The Basics of RVUs

The RBRVS system assigns RVUs for each CPT code based on three components:

• Work Relative Value Units (wRVUs), also called work RVUs — ~50%
• Practice expenses RVUs (peRVUs) required to deliver the service — ~44%
• Malpractice risk RVUs (mpRVUs) associated with the procedure — ~3% to 4%

There’s also a Geographic Practice Cost Index (GPCI) component. Read more about RVUs in healthcare and how they’re calculated.

wRVUs are the key measure used in an RVU analysis for provider productivity and pay. They reflect the time, skill, training, mental effort, clinical judgment, and intensity required to provide patient care.

Higher wRVUs can mean a greater reimbursement opportunity. But actual revenue and profitability depend on additional factors.

RVU Analysis to Measure Provider Productivity

An RVU analysis can help providers and their practice managers understand performance for an individual provider, medical group, or hospital system. 

Tip: Because some providers are part-time and wRVUs vary by specialty, when doing an RVU analysis, you want to normalize RVUs when comparing them.

To measure provider productivity with RVUs, use the wRVU component. 

For your analysis, the baseline is that more work (wRVUs) equals more work output and increased patient volume. Higher wRVU production may mean increased reimbursement opportunities. Actual revenue though depends on payer contracts, reimbursement rates, denials management, coding accuracy, payer mix, operational costs, etc..

To measure basic provider productivity, start with reports that show where wRVUs come into play. For example, take a full year’s worth of data and look at: 

• Total visit count by provider
• Total work RVU based on CPT codes 
• Total reimbursements
• Total physician compensation

Also choose an external compensation/productivity benchmark database, such as MGMA DataDive, AMGA Medical Group Compensation Survey, SullivanCotter Physician Compensation and Productivity Survey, or another of your choice. Benchmarks assess data from providers nationwide and group them by speciality, practice type, geographic region, full-time equivalency (FTE), and sometimes organization type and size to establish percentile cutoffs for annual wRVU productivity.

RVU Analysis — Provider Productivity Example

The following example assumes an established primary care practice with four providers. For simplicity, it assumes all four are MDs. 

The table below looks at office visits, coding distribution, and total wRVUs for each provider. Total RVUs are divided by the number of visits to calculate a ratio — shown in bold at the bottom of the table. 

Sample Provider Productivity by CPT Code

Comparing each provider’s total wRVUs against a national benchmark, you see:

• Dr. Dean is in the 90th percentile
• Dr. Ashton is in the 80th percentile
• Dr. Warren is in the 70th percentile
• Dr. Logan is in the 70th percentile

The percentiles compare providers against national benchmark datasets — not against each other. For example, Dr. Dean’s 90th percentile ranking means they generated more wRVUs than 90% of comparable physicians in the benchmark population. 

Using a Provider Productivity RVU Analysis

Whether you find high or low percentiles, an RVU analysis uncovers an opportunity for you to improve or validate provider performance and find actionable insights that can impact your practice.

For example, you can break down why Dr. Ashton’s wRVUs are lower than Dr. Dean’s, despite having similar patient volumes. You can look at the coding distribution and see that: 

• Dr. Ashton has high utilization of CPT 99213
• Dr. Ashton has relatively low utilization of CPT 99214
• Dr. Ashton also has high volumes for lower-level office visits

This may indicate:

• Dr. Ashton sees patients with less complex medical needs
• Dr. Ashton is conservative with coding patterns
• Dr. Ashton doesn’t always complete documentation
• Dr. Ashton is undercoding

The administrator may want to:

• Review Dr. Ashton’s documentation quality
• Compare Dr. Ashton’s coding patterns against the other providers
• Audit Dr. Ashton’s evaluation and management (E/M) level distribution
• Evaluate Dr. Ashton’s  patient complexity and case mix

If Dr. Ashton is undercoding, the practice may be missing reimbursement opportunities.

RVUs for a Provider Cost Analysis

To calculate compensation per wRVU for the practice, divide total provider compensation by total wRVUs generated. In this example, the practice paid a total combined physician compensation of $800,000 and generated 34,744.92 total wRVUs.

Compensation per wRVU = Total compensation/Total wRVUs or

 $800,000/34,744.92 = $23.02 per wRVU

The same formula can be used at the individual provider level. Based on a $200K salary for each provider:

• Dr. Dean’s compensation per wRVU is $17.17 with 11,648.11 total wRVUs
• Dr. Ashton’s compensation per wRVU is $23.64 with 8,459.23 total wRVUs
• Dr. Warren’s compensation per wRVU is $27.09 with 7,383.97 total wRVUs
• Dr. Logan’s compensation per wRVU is $27.57 with 7,253.61 total wRVUs

Compared to the practice average of $23.02 per wRVU, Dr. Dean’s compensation cost is below average, and Dr. Ashton’s aligns with the practice average. Dr. Warren and Dr. Logan exceeded the practice average.

Higher compensation per wRVU doesn’t necessarily mean there’s a problem, though. Before making a conclusion, administrators also need to evaluate productivity opportunities, scheduling utilization, patient complexity, panel composition, compensation structure, and administrative responsibilities.

Sample Provider Cost by CPT Code with wRVUs per Visit Added

Provider Reimbursement Analysis

Healthcare organizations often compare reimbursements against wRVUs produced to evaluate:

• Reimbursement per wRVU
• Efficiency
• Payer mix performance
• Coding accuracy
• Revenue cycle trends

Using the practice example, an RVU reimbursement analysis lets you evaluate whether reimbursements and provider productivity line up.

During the year, the practice generated $3,221,548.98 in reimbursements and 34,744.92 total wRVUs. To calculate reimbursement per wRVU, divide total reimbursements by total wRVUs.

• Reimbursement per wRVU = Total Reimbursements/Total wRVUs or
• $3,221,548.98/34,744.92 = $92.72

You can use the same formula to calculate reimbursement per wRVU for each provider:

• Dr. Dean: $92.67 
• Dr. Ashton: $97.79
• Dr. Warren: $85.19 
• Dr. Logan: $95.23 

Findings

Dr. Ashton has the highest reimbursements per wRVU and compensation costs near the practice average. So they’re one of the practice’s strongest performers. 

Dr. Dean and Dr. Logan both perform well for productivity and compensation cost.  

Dr. Warren delivers the lowest reimbursements and is below the practice average in reimbursements per wRVU unit. To better understand Dr. Warren’s lower reimbursements, the administrator might: 

• Review non-contractual adjustments for Dr. Warren
• Analyze Dr. Warren’s payer mix and case mix compared to the practice average
• Compare reimbursement rates across Dr. Warren’s largest payers
• Review Dr. Warren’s coding patterns and claim denial trends

You can use a reimbursement analysis to help determine bonuses and well as raises.

Using RVUs to Calculate Bonuses

An RVU analysis is a way to measure productivity improvements, uncover reimbursement opportunities, reward high-performing providers, and support data-driven compensation decisions. Many organizations structure compensation on a base salary, productivity thresholds, incentivize compensation tied to wRVU production, and quality or value-based performance measures. 

The goal is to incentive providers to generate more RVUs and reward those who already do. In the example, you might give Dr. Ashton a healthy bonus to reward their reimbursement efficiency and lower compensation cost relative to their output. 

For Dr. Warren, you might incentivize them to code more properly, improve their documentation, or reach higher patient volumes depending on a deeper analysis of the cause of their low reimbursements.

The goal isn’t simply to increase RVUs, but to improve productivity, reimbursement, documentation, and operations without impacting patient care. 

The Value of an RVU Analysis

An RVU analysis gives you a standardized way to evaluate provider productivity, reimbursement performance, and compensation efficiency. Combined with reimbursement and coding data, RVUs can help you with compensation models. 

RVU analyses also help administrators make more informed staffing, productivity, and financial decisions. The goal isn’t simply to increase volume, but to improve operational and financial performance while maintaining quality patient care. 

Use Azalea Analytics for your RVU Analysis

When you use the Azalea Ambulatory EHR you gain access to a built-in Production RVU Analysis report. You can use the report to track wRVUs by provider, CPT code, and date range. 

You can also access these reports in Azalea Analytics, which can be used with the ambulatory EHR or Azalea Hospital EHR.

• Enterprise wRVU and Modifier Report that provides a multiprovider/facility view
• wRVU per Provider and Facility Grouping
  General wRVU data/report configuration

Note: some setup is required to take advantage of these reports.