Let’s assume that on your own or because you read my previous paper titled “Why Freeze Work RVU’s?” that you have decided to freeze next year by using 2020 Work RVU’s (wRVU). Now what?
The obvious first step is to communicate and convince those affected as to why this is the best decision for your organization. I suggested some ideas in the previous paper that you can work from to build your communication plan. As an extension of those ideas I have provided in this paper some specific factoids as further assistance for your communication plan, and additionally to suggest how you can best leverage data from having frozen wRVU’s for 2020.
Factoids:
- The 2020 Medicare Physician Fee Schedule conversion factor of 36.0869 is proposed to be revised to 32.2605 for 2021 in order to achieve Medicare budget neutrality.
- As depicted in the below chart of sampled E&M codes, the trend of change in wRVU’s after adjusting for the -10.6% trend in the 2021 conversion factor does not in and of itself predict the change in Medicare Allowed amounts.
- In addition to the changes in reimbursement amounts for various services, the unusual and disparate impact of the pandemic on the volume of patient services by specialty during 2020 is causing most CFO’s to question what volumes to use for estimating 2021 revenue for their organization.
- Questions as to the accuracy of estimated volumes by specialty for 2021 likewise impacts any estimate of the effect to changes of wRVU salary conversion factors on budgeted physician salary expense.
- There remains uncertainty as to how virtual visits will be reimbursed in 2021 by all carriers and what is the appropriate wRVU to be assigned to these visits.
- Salary surveys that contain 2021 wRVU based production and compensation statistics will not be available until mid-year 2022.
- The 2021 salary surveys will reflect the uncertainties described above regarding any meaningful relationship of how compensation was set in 2021 and the recalibrated 2021 wRVU’s. The 2021 surveys create an important launching point, but the 2022 salary surveys may be the first reliable source of guidance following the recalibration of wRVU’s in 2021.
The above factoids clearly point to the need to use actual 2021 data to support any material change in an organization’s compensation plan including salary-wRVU conversion factors. They further point to the need to use metrics in addition to wRVU’s for analytics in decision-making for at least the next few years.
Most organizations can collect wRVU’s from their billing system. Freezing the wRVU updates within their billing system can help with the suggestion of using 2020 wRVU values for compensation plans during 2021. However, this presents the problems of: (i) having to develop “gap codes” where there are differences between what codes can be billed in 2021 vs what codes had wRVU values for 2020, (ii) how one can readily value 2021 wRVU’s for salary survey submission when their system was not updated, and (iii) the organization’s ability to evaluate in detail with actual volumes by specialty the side-by-side relationship of 2020 wRVU’s to 2021 values. Even if the organization can easily overcome these problems from freezing their billing system, it still does not provide a source to the additional metrics needed for analytics once the organization prepares to graduate to using 2021 RVU’s.
Organizations should prepare for the processes needed to calculate Total RVU’s, segmented by Facility and Non-Facility, as well as similarly segmented Medicare Allowed amounts. Whether the organization chooses to calculate Local or National allowed amounts would not materially impact compensation plan decision-making, but Local allowed amounts certainly can add data intelligence for budgeting and contracting. The execution steps required to calculate Local allowed amounts is substantial and should be considered carefully.
CompConfidence can assist organizations by automating this time-consuming task using its RVU tracking module. Need help? Want to avoid re-inventing the wheel? Reach out to us at https://compconfidence.com/contact/ . We can help in more ways than you can imagine.