RVUs

RVUs, or relative value units, are a system used primarily in the United States to quantify the value of physician services for purposes of reimbursement under the Medicare Physician Fee Schedule. They provide a standardized metric intended to reflect the relative resources required to perform a service, including physician work, practice expenses, and malpractice risk, rather than the service’s price or charge.

RVUs are divided into three components: work RVU (wRVU), which accounts for the physician’s time, technical skill, effort, and judgment; practice expense RVU (peRVU or PE RVU), which covers overhead costs such as staff, equipment, and supplies; and malpractice RVU (mRVU), which accounts for professional liability costs. The three components are summed and adjusted by geographic cost indices and then multiplied by a conversion factor to determine the payment amount. Geographic Practice Cost Indices (GPCIs) modify each component for location differences.

In practice, RVUs are used to set Medicare payments for individual CPT codes, to benchmark physician productivity, and to inform compensation models in many medical groups and private payers. The system is part of the Resource-Based Relative Value Scale (RBRVS), introduced in the 1990s to standardize physician reimbursement and curb fee inflation.

Critically, RVUs measure resource use rather than patient outcome or service quality, and they can influence coding behavior and service mix. They are periodically updated by the Centers for Medicare & Medicaid Services (CMS) and the American Medical Association through regulatory and organizational processes.