The Executive Suite: 5 questions to ask about wRVU compensation

Physicians employed by a medical group, hospital or academic institution are commonly compensated using a productivity formula based on work relative value units (wRVUs). Since wRVUs drive your paycheck, it’s to your advantage to ask questions in order to understand how the system works - and specifically how your employer counts wRVUs.

What are wRVUs?

Medicare establishes an RVU for each CPT code to determine reimbursement. The RVU has three components: physician work, practice expense and malpractice. The physician work RVU, or wRVU, is a "neutralized" way to quantify and compare the productivity of physicians because it eliminates variables such as fee schedules or geographical costs.

Most groups multiply the wRVUs for services provided by a conversion factor to determine all or part of a physician’s compensation. For example, a surgeon who is paid at $60.00 per wRVU and produces 6,000 wRVUs would be compensated $360,000.

What’s there to understand?

It seems pretty simple, but as the saying goes, the devil is in the details. Counting wRVUs is not entirely straightforward, and too often a lack of transparency between administrators and physicians, whether intentional or not, sows seeds of doubt that can grow into a tree of distrust and hostility.

5 questions to ask your administrator

To avoid this dismal destiny, ask your administrator these five questions to start the conversation of understanding how the system works. (Administrators, be sure you can answer the questions. Better yet, consider proactively discussing your institution’s wRVU methodology with employed physicians to keep communication lines open and clear.)

1. Are wRVUs credited on codes submitted or codes paid?

In most cases, you will be credited for the CPT codes submitted, regardless of the reimbursement received. But get clarification about that, anyway. Furthermore, understand if reports are generated using date of service or the date the charge was billed out. This will make a difference for those services performed in one month that are billed out the following month. Remember: Delays in billing, whether by you or by the billing team, can delay wRVU credit for your compensation.

2. Do modifiers impact the wRVU credit? If so, how?

Modifier impacts to wRVUs commonly cause physicians to believe they’ve been “cheated” out of compensation earned.

Some groups discount the wRVU for the second side of bilateral procedures, consistent with the reimbursement methodology used by most payers. For example, the CPT code 19318 for a breast reduction surgery has 16.03 wRVUs. When billed as a bilateral procedure (by attaching modifier 50), many payers will reimburse for 150 percent of the fee schedule, not 200 percent. Likewise, the hospital will credit the surgeon with 24.0 wRVUs, not 32.06. Physicians who discover this type of wRVU adjustment months or years into their employment are typically shocked at the perceived deception.

Other modifiers that may decrease wRVUs are:

modifier 51 - multiple procedure

modifier 59 - distinct procedural service

modifier 62 - two surgeons/co-surgeons

modifier 76 - repeat procedure

modifiers 80 - assistant surgeon

modifier 82 - assistant surgeon when a qualified resident surgeon is not available

3. What credit do I receive if I bill a code for an unlisted procedure?

CPT codes for unlisted procedures, such as 64999 (unlisted procedure, nervous system), are not assigned a wRVU by CMS. If you use any of the unlisted codes, have a discussion with your administrator about a suitable value for the service. Suggest a similar procedure to use as reference and discuss an appropriate adjustment to the wRVU to reflect the work required for the unlisted procedure.

4. Who is authorized to change the codes/modifiers I submitted?

Best practice is for physicians to assign the CPT codes for services performed. In most cases, after you submit your codes, a coder or biller reviews the charges and potentially changes the code(s) or modifier(s) based on documentation and payer rules. This directly impacts physician compensation, so you should take interest in who is handling your claims.

Understand the protocol for making changes and insist on a system for being notified. And, ensure that you, as well as the coders and billers, stay current on coding education.

5. Can I see a detailed transaction report each month of the codes submitted and wRVUs credited?

Shrewd physicians insist on reviewing the transaction report each month to ensure all services were billed and to confirm the correct wRVUs were credited for each code. Consider keeping your own log of codes submitted and reconciling it with the monthly report to confirm all services were captured. Doing this monthly is a good habit, allowing you to catch discrepancies early so they can be quickly addressed.

To ensure you are paid for the work you do, it’s essential for physicians to be actively involved with reviewing wRVU calculations. Likewise, it’s important to have open and ongoing communication between physicians and administrators to maintain an accurate compensation plan as well as high physician engagement.