For payment purposes, all of a doctor's patients aren't the same. Some require far more time and effort than others, which a relative value unit payment system acknowledges. Compensation for health care providers working under an RVU model focuses on how much work a physician performs, rather than the actual number of patients. Formulas for determining RVU are based on three primary components, along with the costs of practicing medicine in particular regions.
For Medicare and other health insurance reimbursement, RVUs are calculated based on the doctor's work -- the skills and time required for servicing patients overall, not each individual patient. The health care provider's practice expenses also come into play, so that hospitals and individual or group doctor's offices receive different RVUs. A practitioner or facility's malpractice expenses, based on the likelihood of liability, make up the third component.
Health care administration staff enter specific codes and unit numbers for all work provided into a computer, which calculates the RVU for compensation purposes. Codes also include whether the service took place in a facility -- such as a hospital -- or non-facility, such as a doctor's office.
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