In the world of physician compensation in the United States, a value-based system is the most common way that physicians are paid. But with health systems as diverse as they are, the formulas for calculating the value of a given procedure or service provided can be quite complex. Medical professionals are faced with the task of assigning a CPT (Current Procedural Terminology) code to each and every service a physician provides. These are organized on several axes, including the categories of devices and drugs, performance measures, and emerging technology services. CPTs are an ever-changing system, making their identification increasingly complicated, especially given that the more complex the procedure, the more CPTs will be assigned. And as productivity-tied compensation rises, the structures used to calculate compensation are ever-evolving.
What Is A wRVU? How Does It Tie Into Pay?
In a value-based compensation landscape, CPTs are assigned specific work relative value units (wRVUs), and these are used to calculate physician productivity and therefore physician compensation. This is separate from how much money can be billed for a given service. It is important to note that the amount of work being done (denoted numerically in wRVUs) is only one element of the total relative value units. The RVU also incorporates physician and practice expenses and malpractice insurance. However, the amount of work done and the number of skills required, as calculated by the work RVU, are still the primary determinants of how much a physician will take home. As of 2019, the standard wRVU rate was $37.89 per unit, as determined by CMS. Each CPT-coded procedure is assigned a wRVU quantity, and this determines how much can be charged for said procedure. Take an example from the world of plastic surgery. A patient with severe acne may receive a cryotherapy procedure to reduce the acne. The CPT code for this procedure can easily be found: 17340. From this code, and depending on location and practice, a specific wRVU is assigned. In this case, the wRVU assigned to the procedure based on code 17340 is 0.77. The wRVU totals per diem are what are then used to determine physician productivity, and thereby their compensation. The compensation varies by health system, so this is something you will want to ask of your prospective employer.Related: Physician Contracts: Independent Contractor vs. Employee
What Factors Determine wRVU Calculation?
As mentioned before, it is not always as simple as finding a singular, universal CPT code and calculating a singular wRVU total. The wRVU total depends on the facility location, which may affect all three elements of the RVU, as well as modifiers that may be added to the wRVU calculation of a given procedure. Modifiers are used in multi-code procedures. The more complex a procedure, the more CPT codes you are likely to have. This makes determining wRVUs a bit more complicated, so we have broken down for you some of the likely modifiers you may encounter as a physician, and how they are used to calculate compensation in a wRVU-based compensation scheme.
Modifiers At A Glance
25: Adds that a significant, separately identifiable evaluation was conducted in addition to the primary evaluation being done on the same day. In the world of plastic surgery, this could mean an evaluation of a skin lesion found on the same day of a separate evaluation.50: Modifier code 50 amends a CPT to denote that there is a bilateral procedure. Be careful with this modifier, as it may reduce your wRVU credit. Scroll further down for a more detailed explanation of wRVU reductions. 51: This code denotes that a separate procedure was done in addition to the originally-coded procedure. 59: Code 59 establishes a ‘distinct procedural service.’ It refers to a separate procedure performed on someone in a different part of their body from that of the first procedure. 62: Similar to Codes 80-82 in nature, this modifier indicates that two surgeons were present during a particular surgical procedure. 78: Code 78 indicates that an unplanned visit to the operating room occurred after an initial surgical procedure, and that the unplanned visit involved a related service.80, 81, 82: These codes denote that an assistant surgeon was present during the procedure. Code 80 is the simplest of the three, indicating a procedure that typically requires an assistant physician to be present. Code 81 indicates that there was a minimum assistant surgeon, meaning that they were not present during the whole surgery. And Code 82 represents the presence of an assistant surgeon due to the unavailability of a qualified surgeon.91: This code indicates a repetition of a test. It is used when a certain test is conducted twice on the same day, but both with separate specimens being tested, and not to confirm previously tested results.—These are just several of the dozens of modifiers that can be used to tabulate multiple or additional procedures that occurred during a surgical experience. It is important that the correct modifier be used in each claim. Neglecting to provide proper documentation of a service risks that the claim will not be properly reimbursed. What is more difficult to know is when to use certain modifiers over others, as certain modifiers, under broader CMS guidance, will result in a reduction of the wRVU for that procedure. These are especially important for independent physicians who handle their own billing and reimbursement. The Multiple Procedure Payment Reduction (MPPR) policy set out by CMS provides guidance for these scenarios. However, as CPT codes and their modifiers evolve within the current reimbursement landscape, the proper protocol for modifiers and their wRVU reductions becomes murkier. Here are some guidelines about which code modifiers will result in which reductions. Among the codes that indicate that an assistant surgeon was present, the procedure modified with Code 80, 81, and 82 is subject to a reduction in the wRVU total. The presence of a second surgeon performing aspects of the procedure means that there is less work being done by the primary surgeon. These codes are generally consistent in their applicability of reductions, and are deemed to be a fair representation of the overall work done during a procedure. Similarly, Code 62 will result in a reimbursement reduction to 62.5% of the original credit due to the relatively equally split work between two co-surgeons. Here again, the ethical split of the wRVU credit seems reasonable.Other codes, including Code 51, create a trickier set of scenarios. Many surgical operations assume a bilateral procedure, and under MPPR guidelines, the second of the two procedures is reimbursed at 50% of the first. Many institutions then tie wRVU credits and productivity to the amount reimbursed under MPPR guidelines. Consider a blepharoplasty of the lower eyelids (CPT 15820). Under the MPPR guidelines, the second of the eyelids would be eligible for a modifier of 51, meaning that the resulting reimbursement for the second portion would be halved, and the wRVU credit, in many situations, also reduced.
The Bottom Line
The amount of reimbursement reduced during multiple procedures is also dependent on the modifier that is used. Modifiers 25, 50, 51, sometimes 59, and 91 all involve 50% reductions, while Codes 80-82 represent much lower reductions. A second consideration to make as you file claims is the relationship between reimbursement and wRVU totaling. Make sure to confirm with your employer what system they use to determine wRVU reductions. The reduction in wRVU credit is not universally applied, as many allied health companies recognize that the overlap in procedures is resultant from an overlap in facility equipment usage, and not an overlap in physician work performed. That being said, there are still many systems that will assume for any payment reduction due to MPPR, an equal wRVU credit reduction is applicable.
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