Relative Value Units (RVUs) to Measure Success in Your Medical Field

RVU’s is a copyrighted scale and resource-based methodology which has been in
wide use throughout the industry since 1988. The relative value units (RVUs) for
professional and technical component splits are the same as the global service RVU.
Medical Procedure Charges (MPCs) are created for the component splits by changing
the conversion factor, not by splitting the RVUs by a percentage. The conversion factor
used is more accurate because it takes into account all CPT codes performed by the
physician, along with the frequency (count) of each service.

URS Billing Services has developed fee schedules using Relative Values, Conversion
Factors and zip code specific criteria. The Relative Values (RVs) are used to develop
fees specific to the medical practice’s geographical area. RVs weigh medical
procedures relative to one another on a scale linked to difficulty, work, risk and the
material cost of the procedure. The second factor can be characterized as simple
statistical profiling of charges in the geographical areas.

Percentiles are frequently misunderstood and inaccurately utilized. URS Billing Services
bases its findings, methodology and current databases, on fees in the 75th percentile,
not necessarily 75% of the highest range. If the fee for a given service is at the 75 th
percentile, then it means that 75% of the submitted charges for that fee is higher than
your fee.

In calculating fees, we used two percentiles (75.0% & 80.0%) because of current fee
structures and patient demographics. URS Billing Services does not advise using the
95th percentile because of the current political atmosphere of cost containment.

Moreover, consistent high-level billing could be harmful to the financial well-being
of the medical practice. As managed care networks become more prevalent, high
priced physicians may find themselves without an invitation to be involved with some
healthcare organizations. Equally painful, physicians may find themselves losing
patients who are increasingly unable or unwilling to tolerate high out-of–pocket medical

Also, keep in mind, Insurance Adjustments indicated on the ‘explanation of benefits’
show what your practice agreed to accept in your contractual agreement with that
provider. Adjustments are based upon a variety of reasons, including such factors as
who was the primary physician, location of service, equipment ownership and the role of
the physician in the overall treatment of the patient. In cases where adjustments appear
unusually high compared to reimbursement amounts, it generally reflects any one or
combination of the above reasons. It does not necessarily mean that charges should be
lowered or raised.


5 Way to Improve Profitability

1. Increase patient volume - The first step to improving profitability, in most practices, is attracting more patients. Many patients select or are referred either from referrals, by specialty, relatives, word of mouth or friends. There are many ways of attracting new patients to medical practices. First – asking current patients to refer friends, relatives and establishing an effective referral system or using a marketing service.

2. Contract a physician liaison - Once a practice has established its operating philosophy, communicate with other geographically located physicians, regardless of specialty, which services are available. This process can be effectively conducted by contracting with a marketing service of hiring a physician liaison or sales/marketing manager.

3. Communicate with both primary care and specialists - Communicating and establishing relationships with physicians in your practice’s geographical area, including those who currently refer patients, is an important key and ensures many physicians will likely refer to your facility, says Richard Tamburello, Managing Director of URS Billing Services, L.LC. "Maintaining open communications and providing follow-up reports and updates to the referring practice is important and should not be overlooked. Open communications with all physicians is important, especially to referring physicians and primary caregivers. There will be at some point in time in the patient’s history that insight, support and treatment might require exchange of thoughts and possible treatment", says Richard Tamburello, Managing Director of URS Billing Services, LLC

4. Provide referring physicians with the clinical results and services they expect - This is where many practices have fallen short because of time, shortage of personnel or neglect. The number one key information piece some treating physicians fail to disclose to referring physicians is the open line of communications. It is not only a professional courtesy, but providing results of the treatment to the referring practice helps the practice by receiving insight of the results. Plus, instituting open lines of increases the prospects of receiving more patient referrals.

5. Maximize each physician’s case load - Once the practice establishes a comfortable patient load level, including referrals, physicians should at levels that sustain quality level of care and maintaining good bedside manner. One method is offering bonuses or other incentives based upon meeting and exceeding established patient treatment goals. For example, front desk personnel should take patients from the waiting room to the procedure room. Once the patient is settled, set a time frame in which the patient is seen by the doctor (5 minutes, 7 minutes or maximum of 10 minutes), then track the time and possibly incorporate a `special recognition’ award to the physician and front desk personnel. Although there is some resistance to this procedure, increasing case load is not about rushing procedures but accelerating other aspects of the visit - registration, insurance verification, setting a patient up in a room and discharge.

In conclusion, these are just a few ways to improving efficiencies and the profitability of the medical practice. Today’s medical practices need to `re-exam’ and re-evaluate ALL internal operations and fine ways to optimize revenues and better manage production, labour and benefit costs. If current operations are not changed or effective innovative marketing concepts not implemented, there will be fewer dollars left at the bottom-line the end of each month and at the end of the year.