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Can someone explain the conversion factor for wRVU for me?

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  • Can someone explain the conversion factor for wRVU for me?

    Dumb question trying to make sure I understand how wRVU conversion factors work. Everything I read online says that they are a fixed value set by CMS, and it was ~$36 back in 2020.

    However, my contract says my conversion factor is in the mid 50s when my contract eventually moves from a guarantee to a productivity model in a couple years.

    Are they specialty dependent? My understanding is the rate is not really negotiable on the individual level (I work for a group under a hospital, and have the understanding that the hospital system sets the conversion factor rate for the group).

  • #2
    Lesson #1, Everything is negotiable, but not after you sign a contract.

    wRVU is a value of work placed on a service you perform
    conversion factor is a dollar amount used to determine how much you get paid for that service.

    If an OV , 99213 is 1 unit of wRVU and the conversion factor is $65 , then you get $65 for each 99213 you perform.

    You really don’t have much control of if an 99213 is determined to be 1 wRVU or 1.5 wRVU , theses numbers are set by the powers that be.

    You do have the ability to negotiable what your conversion factor is, mine is 60 and indexed for inflation in the contract. Some contracts have clauses for a certain conversion factor below a threshold number, say 4000 wRVU with a different number after,

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    • #3
      Yes the conversion rate is set by CMS, in the $30s like you mention. It’s been essentially the same for decades.

      Physicians make more per work RVU (i.e. your contract’s conversion rate is higher than the Medicare rate) because #1 almost everything you do generates more revenue for your hospital system than just your work RVU. Ordering an X-ray, MRI, labs, cast, injection, admitting a patient, surgery facility fee, etc. And #2 many insurances pay better than Medicare.
      Last edited by abds; 01-25-2022, 01:35 PM.

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      • #4
        https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7965749/

        Pay = RVU * CF (sort of like Pay = hours * hourly rate)

        RVU is what Medicare sets as the amount of work that's typically involved for a CPT code
        Conversion factor is the pay per RVU
        2022 CF = $34.6062

        Total pay = pay for work, facility, and malpractice

        Medicare will not negotiate these prices with you. This is what they pay. Most payor contracts are usually a multiple of Medicare rates (anywhere from 0.5x - 3x+). I'm guessing most hospital contracts with payors are around 3x Medicare. What you get from the hospital will depend on what their contracted rates are, their payor mix, and what you negotiate. Insurances pay better, but they also deny a lot more claims. Sounds like your CF is around 1.5x Medicare. So if you're in an affluent area with lots of commercial payor patients, the hospital is probably making quite a bit from you. If you have a lot of Medicare and especially Medicaid and self-pay, then you might be OK.

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        • #5
          How many work RVUs are you generating now, that is probably your best glimpse into how this will play out. The RVUs are specialty dependent in that procedures generally generate many more RVUs per hour than cognitive work. But the conversion factors are the same across Medicare. There has been a lot of downward pricing with conversion factors and commercial insurance. Many physician practices are tilted towards Medicare which can make hitting a CF in the mid 50's harder to achieve. Bottom line, I'd simply look at your projected work RVUs times the CF and see what that looks like. Note that the work RVU is just a portion of the total RVU for a CPT code, the rest is supposed to cover overhead, so I'd assume the hospital is covering your malpractice, support staff etc.....

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          • #6
            I think you will find your wRVU is only negotiable as a group. Meaning all of your group has same $/wRVU. Oftentimes hospital systems have a policy around how $/wRVU is decided and there is little wiggle room. Of course if it is really low as group you should renegotiate.

            If other partners within your group don't complain about the $/wRVU I wouldn't make a fuss with administration.
            What I would do is track everything you do with wRVU attached to it and make sure the hospital is calculating your total wRVUs correctly.

            Keep in mind: not sure if it is purposeful or not but many hospitals offer a large 2-3 year guarantee while you are ramping up wRVUs, to then have a lower $/wRVU factor. I'm sure you can get your partners/groups wRVU production and thus estimate salaries. Hopefully the productivity you see yourself doing will be enough to support the salary you desire.

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