What Are RVUs? Work RVUs, the Conversion Factor and How Doctors Are Paid

What are RVUs? Relative value units (RVUs) are the points Medicare assigns to nearly every service a physician or other clinician bills, from a 15-minute office visit to a knee replacement. Multiply a service’s RVUs by a dollar amount called the conversion factor and you get its Medicare price. Most private insurers and most employed-physician contracts use the same RVUs, which is why “RVU” has become shorthand for physician productivity and pay.

The three parts of an RVU

Every service in the CMS Physician Fee Schedule has three RVU values:

• Work RVUs (wRVUs) measure the clinician’s time, skill, effort and stress. They are roughly half of the total and are what most physician compensation plans count.
• Practice-expense RVUs (PE RVUs) cover staff, equipment, supplies and office space. They differ by setting: a service done in your own office (non-facility) gets more PE RVUs than the same service in a hospital (facility), because the hospital is paid separately for its costs.
• Malpractice RVUs (MP RVUs) cover professional liability insurance and are the smallest part.

The table below shows real values for common codes, from the CMS relative value files:

Relative value units for common codes

Code and service	Work RVU 2023	Work RVU 2026	Total RVUs (office)	Medicare national rate (office)
99212 Office o/p est sf 10-19 min	0.70	0.70	1.78	$59.45
99213 Office o/p est low 20-29 min	1.30	1.30	2.85	$95.19
99214 Office o/p est mod 30-39 min	1.92	1.92	4.06	$135.61
99215 Office o/p est hi 40-54 min	2.80	2.80	5.76	$192.39
99204 Office o/p new mod 45-59 min	2.60	2.60	5.31	$177.36
99223 1st hosp ip/obs high 75	3.50	3.50	4.68	$156.32
99285 Emergency dept visit hi mdm	4.00	4.00	5.13	$171.35
45378 Diagnostic colonoscopy	3.26	3.18	11.32	$378.10
27447 Total knee arthroplasty	19.60	19.11	34.71	$1,159.35

From RVUs to dollars: the conversion factor

Medicare turns RVUs into dollars with the conversion factor, set each year in the Physician Fee Schedule final rule. For clinicians who are not in an Advanced Alternative Payment Model it is $33.4009 for the current year (it was $33.8872 in 2023). The basic formula is:

Payment = (work RVU × work GPCI + PE RVU × PE GPCI + MP RVU × MP GPCI) × conversion factor

GPCIs (geographic practice cost indices) raise or lower each part for local costs, so the same visit pays more in Manhattan than in rural Mississippi. Medicare then usually pays 80% of the allowed amount and the patient or a supplemental plan pays the other 20%.

Why RVUs matter for your paycheck

Many employed physicians are paid partly or fully on work RVUs: the employer multiplies the wRVUs you generate by a dollar rate (for example, a set amount per wRVU), often on top of a base salary. That makes three things important to understand:

1. Which codes you bill. In family medicine, for example, a moderate-complexity established-patient visit (99214, 1.92 wRVUs) is worth almost 50% more work RVUs than a low-complexity one (99213, 1.30 wRVUs). Accurate documentation of the complexity you actually handle is the biggest driver of RVUs. See how to increase your RVUs honestly.
2. How your specialty compares. Procedural specialties generate far more work RVUs per Medicare patient than primary care. Our work RVUs by specialty analysis shows the full range.
3. The dollar rate in your contract. The rate per wRVU, thresholds and base salary are negotiable. See how to negotiate an RVU contract.

Who sets RVU values?

CMS sets RVUs every year through public rulemaking, usually starting from recommendations by the AMA/Specialty Society RVS Update Committee (RUC). Changes must be budget-neutral overall, so raising one group of services lowers others through the conversion factor. In 2026 CMS also applied an “efficiency adjustment” that trimmed the work RVUs of many procedures slightly (total knee arthroplasty fell from 19.60 to 19.11 wRVUs); office visits were not cut.

Limits of RVUs

RVUs measure billed services, not quality, outcomes or time spent on things that aren’t billed, such as many phone calls, inbox messages, teaching and administration. They also undervalue some cognitive work relative to procedures, a long-running debate in health policy. Use them as one lens on productivity, not as a score.

Sources

RVU values and conversion factors: CMS PFS Relative Value Files (opens in a new tab). Payment formula and GPCIs: CMS Physician Fee Schedule (opens in a new tab). CPT codes and descriptions are copyright the American Medical Association. Related: how doctors are paid, specialty pages.