RVU costing applications

Relative value unit (RVU) cost accounting which uses the resource-based relative value scale (RBRVS), can be used to determine the cost to produce given services and determine appropriate physician fees. The calculations derived from RVU costing have additional applications, such as analyzing fee schedules, evaluating the profitability of third-party payer reimbursement, calculating a floor capitation rate, and allocating capitation payments within the group. The ability to produce this information can help group practice administrators determine ways to manage the cost of providing services, set more realistic fees, and negotiate more profitable contracts.