Relative Value Unit (RVU)
A standardized measure of the value of physician services used by the CMS Medicare Physician Fee Schedule (and many commercial payers) to determine payment amounts. Each CPT code has an assigned total RVU made up of three components: physician work RVU, practice expense RVU, and malpractice RVU. Medicare payment equals total RVUs times the annual conversion factor, adjusted by geography.
Why this matters for your clinic
RVUs drive what you get paid per procedure. They also set the productivity benchmarks for your providers. If your physicians are generating fewer RVUs per session than the specialty benchmark, you are leaving revenue on the table. Not because you are coding wrong, but because your scheduling, workflows, or documentation are inefficient.
RVUs are also the foundation of most provider compensation models. Whether you pay salary, production-based, or a hybrid, understanding RVU production per provider tells you who is carrying the practice and who needs support. It is an objective measure that removes guesswork from staffing and compensation decisions.
What good looks like
The exact RVU values and the Medicare conversion factor change every year. Always look up current values directly in the CMS Physician Fee Schedule Look-Up Tool before running provider compensation or production analyses.
Example
Per the CMS Physician Fee Schedule, a level 4 established-patient office visit (CPT 99214) has a non-facility total RVU of approximately 4.06 (work RVU ~1.92), and a level 5 visit (CPT 99215) has a non-facility total RVU of approximately 5.76 (work RVU ~2.80). If a provider consistently bills 99214 when the documentation supports 99215, you are leaving roughly 0.88 work RVUs per visit on the table. Across 20 visits per day, that is 17.6 work RVUs per day in foregone production — meaningful revenue when multiplied by the Medicare conversion factor and your commercial rates on top of it.
From Sorso
When we rebuild provider comp models, the most common error we unwind is practices paying on total RVUs instead of work RVUs — which rewards providers for practice expense allocation they don't control.
Founder of Sorso. 18 years in corporate finance. Managed a $450M loan portfolio before building a fractional CFO firm exclusively for healthcare clinics.
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