Billing for Physicians
>> How Physicians are paid <<
Step 1: What does RVU mean?
Step 2: How many wRVU are allocated for different encounters?
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:
- 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)