Billing for Physicians 

>> How Physicians are paid <<


Step 1: What does RVU mean?

Your Guide for the RVU Farside

An introduction on the billing system, the difference between RVU and wRVU and RVU compensation for different codes.

Step 2:  How many wRVU are allocated for different encounters? 

RVU count and CPT code for office & hospital encpunters

Table that explains how many RVUs are listed for different encounters (patient visit, EEG, LP...) and CPT code for each encounter.

Step 3:  Now, how much do we get paid for each wRVU?

Called "Medicare Conversion Factor" which changes every year:

For 2018 = Medicare pays 35.999 $ for each RVU

For 2019 = Medicare pays 36.0463 $ for each RVU

Step 4:  Can you give me some examples?

Sure, the table below shows the total payments expected from Medicare:

Visit typeCodewRVU Total billed (2019)Visit typeCodewRVUTotal billed (2019)
Office New - Level V992053.17114.26 $Inpatient New - Level III992233.86139.13 $
Office New - Level IV992042.4387.59 $ Inpatient New - Level II992222.693.72 $
Office New - Level III992031.4251.18 $Inpatient New - Level II992211.9269.2 $
Office Follow up - Level V992152.1176.05 $Inpatient follow up - Level III99233272.09 $
Office Follow up - Level IV992141.554.07 $Inpatient follow up - Level II992321.3950.1 $
Office Follow up - Level III992130.9734.96 $Inpatient follow up - Level I992310.7627.4 $
  • All codes start with 992 and end with number equivalent to the level of care.
  • The 4th number is either: 0 for new office visit - 1 for follow-up office visit - 2 for initial inpatient encounter - 3 for subsequent inpatient encounter.
  • The consultation code (9924 and 9925) is used only in very limited scenarios (when patient is referred for a single time medical opinion, not to follow up with patient).

Step 5: Finally I got it, but how hospitals pay physicians? 

Physicians are compensated either on RVU based, shift based of fixed salary:

  • RVU based: Physicians get fixed amount of money per RVU generated (usually range from 50-60$ per RVU). Hospital gets its revenue from "Practice expense RVU" and revenue generated from diagnostics and surgeries.
  • Shift based: used for hospitalists and ED physicians. Shifts range from 150:200 per hour.
  • Fixed salary: for J1 waiver physicians, the waiver application requires the salary to be guaranteed for the 3-year waiver duration.
  • Locum Tenens (in latin, means Place Holder)