What is the term for the unit representing physician work, practice expense, and malpractice risk in CPT-based service valuation?

• A. Relative value unit (RVU)
• B. CPT code
• C. Medicare rate
• D. Billing unit

Answer: (A)

In CPT-based service valuation, the amount of resources a service uses is captured by a standard unit called the Relative Value Unit (RVU). Each CPT code gets three RVUs: one for physician work, one for practice expense, and one for malpractice risk. Physician work reflects the time, skill, effort, and judgment required; practice expense covers the overhead costs like supplies and staff; malpractice risk accounts for liability costs. Adding these three components gives the total RVU for the service, which is then multiplied by a conversion factor to determine payment. So the unit you’re looking for is the Relative Value Unit (RVU).