In a nutshell, RVUs are 'relative value units' which are a way to assign a value to CPT and HCPCS codes. There are three components in the calculation of the value: 1) amount of physician/provider work; 2) practice expense, which includes supplies, equipment, office space and staff salary expenses, among other things; and 3) malpractice costs. Each of these factors is adjusted up or down based on the geographic location, since costs vary by locations across the country. In turn, two sets of RVUs are created - one based on services provided in a facility and one for those provided in an office (since hospitals and other facilities are compensated for their costs on separate claims).
The value is 'relative', meaning the numbers don't give a dollar or other absolute value to a code, but rather just assign a number that can be used for comparative purposes. So, for example, an average value procedure with have a value of 1.0, and a procedure that involves twice as much work and expense would be assigned a value of 2.0 whereas a procedure with half the work and expense would be assigned 0.5.
Payers will assign a 'conversion factor', which is a dollar value per RVU and which is then multiplied by the RVU of the procedure code, to come up with the fee for that code for reimbursement.