Practice Expense and Its Impact on Radiology Reimbursement.

Practice expense (PE) is one of 3 components that contribute to total relative value units (RVU). Across the Medicare Physician Fee Schedule (MPFS), PE accounts for nearly half of the total RVU. In radiology, however, this number is even higher, largely due to the nature and particularities of the specialty. This makes radiology particularly sensitive to changes and updates in the inputs, methodology and pricing used to calculate PE. In this article we explore the Resource-Based Relative Value Scale (RBRVS) RVU system with emphasis on PE, its direct and indirect components, and its impact in radiology reimbursement. We explore how calculation methodologies as well as budget neutrality adjustment mechanisms have the potential to significantly impact radiology reimbursement and we provide practical considerations.