tci Medicare Compliance & Reimbursement - 2019 Issue 7

Reader Question: Understand How Location Impacts RVUs

Question: What is the “conversion factor,” and how does it affect Medicare payment? Alabama Subscriber Answer: The conversion factor (CF) is a numerical multiplier used to calculate payment rates for the Medicare Physician Fee Schedule (MPFS). CMS adjusts the CF each year using a formula that considers factors such as a medical economic index, budget neutrality, and legislative changes to healthcare coverage. The primary factor used to determine the payment rate for any medical procedure is the Relative Value Units (RVUs) assigned to that procedure. RVUs are based on a resource-based relative value scale (RBRVS) that compares...

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