1. What is the Medicare Payment Formula?

The Medicare payment formula calculates reimbursement based on Relative Value Units (RVUs) multiplied by a conversion factor. This system standardizes payments for medical services across different procedures and regions.

2. How Does the Calculator Work?

The calculator uses the Medicare payment formula:

Where:

• \( Total RVU \) — Sum of work, practice expense, and malpractice RVUs
• \( 32.35 \) — Current conversion factor (USD per RVU)

Explanation: The formula converts the relative value of a medical service into a dollar amount using the nationally set conversion factor.

3. Importance of RVU Calculation

Details: Accurate RVU calculation is crucial for healthcare providers to understand reimbursement rates, practice financial planning, and assess productivity.

4. Using the Calculator

Tips: Enter the total RVU value for the procedure. The value must be greater than 0. The calculator will compute the Medicare payment using the current conversion factor.

5. Frequently Asked Questions (FAQ)

Q1: What components make up Total RVU?
A: Total RVU includes three components: Work RVU (physician effort), Practice Expense RVU (facility costs), and Malpractice RVU (insurance costs).

Q2: How often does the conversion factor change?
A: The conversion factor is updated annually by CMS, though it may also be adjusted by legislation during the year.

Q3: Are RVUs the same for all locations?
A: While RVUs are national, geographic practice cost indices (GPCIs) adjust payments for regional cost differences.

Q4: Can this calculator be used for non-Medicare payers?
A: Many private payers use similar systems but may have different conversion factors or RVU valuations.

Q5: Where can I find RVU values for specific CPT codes?
A: CMS publishes RVU values annually in the Physician Fee Schedule available on their website.