A Physician's RVU Guide: Understanding, Maximizing, and Negotiating Your Compensation

Physicians across the country are increasingly compensated based on Relative Value Units, or RVUs. These metrics are central to how healthcare systems determine physician pay. Yet, for many doctors, the inner workings of RVUs remain unclear. This lack of transparency can result in confusion, burnout, and missed opportunities for fair compensation.

To help physicians navigate this complex system, we’ve created this RVU Guide. Featuring insights from Dr. Glenn Loomis, a seasoned family medicine physician and health system executive, this guide will help you understand RVUs, how they impact your paycheck, and how to advocate for yourself during contract negotiations.

What Are RVUs and Why Do They Matter?

RVUs, or Relative Value Units, are a standardized measurement of the value of medical services. They were developed by Medicare to compare the work and resources associated with different procedures. Every service a physician performs, from a level 3 office visit to a complex surgery, is assigned a number of RVUs.

These values are broken into three components:

• Work RVUs (wRVUs) measure the time, skill, and effort required
• Practice expense RVUs cover overhead costs
• Malpractice RVUs account for professional liability

Most physician contracts use wRVUs as the primary basis for compensation. This makes it essential to understand how they are calculated and tracked.

How RVUs Impact Physician Compensation

Physician compensation models that use RVUs are becoming the norm in hospital systems, academic centers, and private practices. These models offer consistency across specialties and patient populations. However, they also come with potential drawbacks.

Compensation is typically calculated as:

Total Pay = RVUs x Conversion Factor

The conversion factor is the dollar amount paid per RVU. It can range from $40 to $70 or more depending on your specialty, location, and employer. Understanding this multiplier is essential because a high RVU target with a low conversion factor may mean you're working harder for less.

Why Understanding RVUs Helps You Get Paid Fairly

Dr. Glenn Loomis emphasizes that many physicians enter jobs without fully understanding how RVUs affect their compensation. This knowledge gap can lead to surprises when paychecks don’t match expectations.

"What we have to sell is our time," Dr. Loomis explains. "But that time varies in complexity and resource use. RVUs try to quantify that mix."

For example, some procedures generate more RVUs per minute than others. A neurosurgeon may find that injections pay more efficiently than surgeries. Understanding which CPT codes offer the highest RVUs can help physicians tailor their clinical activities strategically.

Common Pitfalls in RVU-Based Contracts

RVU compensation models can reward productivity, but they also introduce risks if not properly structured. Here are common issues physicians encounter:

• Unrealistic RVU Targets: Contracts may set high RVU expectations without considering patient volume, support staff, or schedule demands.
• Lack of Transparency: Employers may not provide regular reports or clear breakdowns of RVU production, making it difficult to track performance.
• Hidden Workload: Duties like teaching, administrative tasks, or committee work often don’t generate RVUs. If these aren’t accounted for in your contract, you may end up doing unpaid work.
• Arbitrary Conversion Factors: Some contracts tie compensation to outdated or irrelevant benchmarks. Always ask how the conversion factor was determined.