Key Terms to Remember
CPT® Codes: Describe medical procedures and services.
ICD-10-CM Codes: Explain patient diagnoses.
Modifiers: Provide additional details about a procedure to avoid edits
or denials.
Medical Necessity: Proof that a service or procedure is needed for
the patient’s health.
Reimbursement: Payment for services provided by healthcare
professionals.
Payment Calculations
RBRVS (Resource-Based Relative Value System)
oPayment is based on three components:
Physician Work: Effort and time spent by the physician.
Practice Expense: Costs for running the practice.
Malpractice Insurance Expense: Cost of liability
insurance.
oThese components are combined to calculate the Relative
Value Unit (RVU) for services.
RVU (Relative Value Unit)
oA measurement used to determine the intensity of each
component for RBRVS payment.
UCR (Usual, Customary, and Reasonable)
oReimbursement is determined based on:
Usual Fee: What the provider typically charges.
Customary Fee: What most doctors charge in the area.
Reasonable Fee: What is fair for the circumstances.
Capitation
oA set amount paid monthly to a primary care provider.
oCovers a specific list of services for each patient in a managed
care plan, regardless of whether the patient is treated.
Fee-for-Service (FFS)
