Assume that a primary care physician performs only physical examinations. Howeve

Question

Assume that a primary care physician performs only physical examinations. However , there are three levels of examination 1,2,and 3- that vary in depth and complexity. An RVU analysis inducates that a level 1 examination requires 10 RVUs, a level 2 exam 20 RVUs, and level 3 exam 30 RVUs. the total costs to run the practice, including a diagnostic laboratory, amount to $500,000 annually, and the numbers of examinations adminerstered annually are 2,400 level 1, 800 level 2, and 400 level 3.

A. Using the RVU methodology, what is the estimated cost per type of examinations?.

B. If the goal of the practice is to earn a 20% profit margin on each examination, how should the examinations be priced?

Explanation / Answer

a. the estimated cost will be $9.615 per RVU aproximately, (the total cost is $500,000 and total RVU s are 52,000)

b. for first level it should be charge $115.38, second level $230.76 and for the last level it is $346.14

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