How Doctors Are Paid? RVUs Explained

Ever wonder how doctors are paid? The answer is Relative Value Units, or RVUs.
They are used by Medicare and insurance companies to determine how much a physician should be paid for their services based on value, expense, and risk of their patient interaction.
First, Work RVUs represent the relative amount of physician work required to perform a particular service or procedure. Work RVUs can include everything from a 20 minute office visit with a new patient to a major surgical operation.
Next is practice expense RVUs, which are designed to cover the cost of running a clinic or hospital, including rent, utilities, medical supplies, equipment, and support staff salaries.
The third and last type of RVU is malpractice RVUs, which account for the relative cost of malpractice insurance associated with providing a specific service.
Inserting a deep brain stimulator is much higher risk than a 20 minute appointment with a new patient.
When you combine work RVUs, practice expense RVUs, and malpractice RVUs, you get total RVUs.
At the time of this video, Medicare set the RVU to dollar conversion rate at $33.2875 per RVU. Insurance companies have their own conversion rates, often in the range of $45 to $75 per RVU.
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Disclaimer: Content of this video is my opinion and does not constitute medical advice. The content and associated links provide general information for general educational purposes only. Use of this information is strictly at your own risk. Kevin Jubbal, M.D. and Med School Insiders LLC will not assume any liability for direct or indirect losses or damages that may result from the use of information contained in this video including but not limited to economic loss, injury, illness or death. May include affiliate links to Amazon. As an Amazon Associate, I may earn a commission on qualifying purchases made through them (at no extra cost to you).