Fundamentals
This three letter acronym stands for the standardized unit CMS uses to measure the value of physician services.
What is RVU?
This is the term for the dollar amount multiplied by total wRVUs to determine physician compensation under a productivity model.
What is the conversion factor?
This organization's annual Physician Compensation and Production Survey is the most widely cited external wRVU benchmark in academic medicine.
What is MGMA (Medical Group Management Association)?
This type of compensation model pays physicians primarily based on their wRVU output rather than a fixed salary
What is a productivity-based (or wRVU-based) compensation model?
This Harvard health economist led the research team that originally developed the RBRVS (Resource-Based Relative Value Scale) in the late 1980s.
Who is William Hsiao?
This is the specific component of the total RVU that captures physician time, skill, and effort, as opposed to overhead or liability costs
What is the work RVU (wRVU)
If a physician generates 6,000 wRVUs in a year and the conversion factor is $55, this is their productivity-based compensation.
What is $330,000
Academic medical centers often compare compensation and productivity data through this association, which represents medical schools and teaching hospitals.
What is the AAMC (Association of American Medical Colleges)?
This type of compensation model guarantees a base salary regardless of volume, often used to protect academic time.
What is a straight salary (or base salary) model?
Congress mandated the shift to RBRVS as part of this 1989 law, which took effect in 1992.
What is the Omnibus Budget Reconciliation Act of 1989 (OBRA '89)?
Besides physician work, these are the other two components that make up the total RVU for a service
What are practice expense RVU and malpractice (professional liability insurance) RVU?
This is the formula for total RVUs for a given service (before geographic adjustment).
What is Work RVU + Practice Expense RVU + Malpractice RVU?
When a department's wRVU per FTE falls below this percentile of a national survey, it's often flagged for a productivity review.
What is the 25th percentile? (accept reasonable range, this is a common threshold)
Many academic compensation plans use this hybrid structure, combining a base salary with incentive pay above a wRVU threshold
What is base plus productivity incentive model?
Before RBRVS, physician payment was largely based on this older, less standardized method tied to prevailing local charges.
What is "usual, customary, and reasonable" (UCR) charges?
This CMS system assigns a wRVU value to virtually every CPT code, and is updated annually
What is the Medicare Physician Fee Schedule (MPFS)?
Medicare payment for a service is calculated by multiplying total RVUs by this second factor, which converts RVUs into dollars nationally.
What is the Medicare conversion factor?
This type of comparison, matching compensation to production percentile within the same specialty, is used to check whether a physician is being paid appropriately for their output
What is compensation-to-production percentile alignment (or "comp to production ratio")?
This term describes the practice of adjusting a physician's wRVU target or base salary to account for non-clinical duties like teaching, research, or administration
What is an academic (or effort) adjustment?
This is the main criticism of wRVUs as a productivity metric: they measure volume of billed services but do not directly capture this
What is quality, complexity of decision-making, or patient outcomes?
This committee, made up largely of physicians and convened by the AMA, recommends wRVU values to CMS for new and revised CPT codes.
What is the RUC (AMA/Specialty Society RVS Update Committee)?
This index adjusts RVUs up or down based on regional cost differences in a physician's practice location.
What is the Geographic Practice Cost Index (GPCI)?
Besides MGMA and AAMC, this consulting and data firm (also known for supply chain benchmarking) publishes physician compensation survey data used by many academic health systems
What is Vizient?
This is the general concern raised when a compensation plan rewards wRVUs alone, since it does not account for this dimension of care.
What is quality (or value, or outcomes)?
CMS updates wRVU values periodically through this rulemaking process, published every fall for the following calendar year.
What is the Physician Fee Schedule Final Rule?