Using RVUs to Determine How Much Your Provider Was Paid
Each CPT code is given a value - an amount of money Medicare will pay a hospital or a physician for that service as an average. Then, cities and other geographic areas are assigned an RVU - relative value amount - that is a percentage, higher or lower, of the average CPT payment.
Here's how that works: Depending on what state and city you live in, the RVU will be higher or lower than the average, based on the cost of doing business. So, for example, say CPT Code X is worth an average of $100 across the United States. The RVU for New York City might be 1.3 which means Code X is worth $130. In Birmingham, Alabama, which has a much lower cost of doing business, the RVU might be .75 - making that CPT code worth $75 in Birmingham, Alabama.