Understanding Value Codes in Medical Billing: A Comprehensive Guide

Medical billers use standardized coding systems to translate medical information about a patient into numeric-alphanumeric terms. The assigned code identifies the services rendered to patients, as well as the monetary reimbursement a provider is entitled to. Value codes convey specific data concerning the amount of money that insurance companies get billed.

Significance

• Value codes are a vital part of medical billing, especially when it comes to Medicare. Since Medicare can serve as a primary or secondary insurance provider, value codes establish the amount of money each insurance company is required to pay. Value codes are generally used on CMS-1450 or UB-04 billing claim forms.

Resource-Based Relative Value Scale

• Value codes are based on a predetermined criterion that uses relative value units and a resource-based relative value scale (RBVS). The RBVS is a reimbursement process used by Medicare that is intended to ensure that the reimbursement amount is equal to a provider's resources.

Relative Value Units

• Relative value units (RVU) are measured blocks used to calculate the total resources and factors that medical practitioners must have in order to carry out services. This includes their skill level, the complexity of the service, duration and the type of equipment used.

Effects

• The sum of the RVU blocks is computed into a monetary total, which is used to establish the financial compensation a provider is entitled to.