Question: Assume that a primary care physician practice performs only physical examinations. However, there are three levels of examination- I, II, and III- that vary in
Assume that a primary care physician practice performs only physical examinations. However, there are three levels of examination- I, II, and III- that vary in depth and complexity. An RVU analysis indicates that a level requires 10 RVUs, a level II 20 RVUs, and a level III 30 RVUs. The total costs to run the practice, including a diagnostic laboratory, amount to $500,000 annually, and the numbers of examinations administered are 2,400 Level I, 800 Level II, and 400 Level III. The estimated cost per RVU is $9.62. If the goal of the practice is to earn a 20% profit margin, how should each examination be priced?
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