Pediatric Coding Alert

Question: What is the difference between facility and nonfacility relative value units (RVUs)?


Kansas Subscriber

Answer: CMS assigns codes facility and nonfacility RVUs. You can measure insurers' reimbursement rates by finding out how much Medicare pays nationally for a code.

To calculate Medicare's payment, multiply the code's RVUs by the year's conversion factor ($37.8975 for 2005). Insurers will pay you based on nonfacility RVUs when the pediatrician performs the procedure in the office or in a clinic. If she provides the procedure in the hospital, the insurer will pay you at the facility RVU rate. 

Nonfacility RVUs usually pay at a higher rate than facility RVUs because they include office expenses, such as rent and equipment. When a pediatrician performs the procedure in a hospital, the facility is responsible for those fees. The conversion factor is the same for both facility and nonfacility RVUs.

Comparison: For instance, the National Physician Fee Schedule Relative Value File shows 54150 (Circumcision, using clamp or other device; newborn) contains 2.67 nonfacility RVUs and 6.32 facility RVUs.

If the pediatrician performs a circumcision in the office, you would report 54150, which CMS values at 6.32 RVUs (6.32 RVUs x 37.8975 CF = $239.51). But if the pediatrician performs the procedure in the hospital, Medicare assigns 2.67 RVUs to 54150 (2.67 RVUs x 37.8975 CF = $101.19). You can compare private payers' rates to these figures.