How To Calculate Medicare Fee

Medicare Fee Formula:

\[ Payment = [(wRVU \times wGPCI) + (peRVU \times peGPCI) + (mpRVU \times mpGPCI)] \times 32.35 \]

Work RVU (wRVU):

units

Work GPCI (wGPCI):

factor

Practice Expense RVU (peRVU):

units

Practice Expense GPCI (peGPCI):

factor

Malpractice RVU (mpRVU):

units

Malpractice GPCI (mpGPCI):

factor

Medicare Payment:

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1. What is the Medicare Fee Formula?

The Medicare Fee Formula calculates physician payments under the Medicare Physician Fee Schedule (MPFS). It combines work, practice expense, and malpractice components adjusted by geographic practice cost indices.

2. How Does the Calculator Work?

The calculator uses the Medicare Fee Formula:

\[ Payment = [(wRVU \times wGPCI) + (peRVU \times peGPCI) + (mpRVU \times mpGPCI)] \times 32.35 \]

Where:

\( wRVU \) — Work Relative Value Unit
\( wGPCI \) — Work Geographic Practice Cost Index
\( peRVU \) — Practice Expense Relative Value Unit
\( peGPCI \) — Practice Expense Geographic Practice Cost Index
\( mpRVU \) — Malpractice Relative Value Unit
\( mpGPCI \) — Malpractice Geographic Practice Cost Index
32.35 — Conversion factor (2023 value, changes annually)

Explanation: The formula accounts for physician work, practice expenses, and malpractice costs, adjusted for regional cost differences.

3. Importance of Medicare Fee Calculation

Details: Accurate Medicare fee calculation helps physicians understand reimbursement rates, plan practice finances, and negotiate contracts with other payers that reference Medicare rates.

4. Using the Calculator

Tips: Enter all RVU and GPCI values. RVUs are typically available from CMS fee schedules, while GPCIs vary by geographic location. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find the RVU values for specific CPT codes?
A: CMS publishes RVU values annually in the Medicare Physician Fee Schedule files available on the CMS website.

Q2: How often do GPCI values change?
A: GPCI values are typically updated every 3 years, though CMS may make adjustments more frequently.

Q3: What is the conversion factor for the current year?
A: The conversion factor changes annually. Check the latest CMS Physician Fee Schedule for the current value.

Q4: Are there services not paid under this formula?
A: Yes, some services like vaccines have separate payment methodologies. Facility vs. non-facility settings also affect payment.

Q5: How does this relate to MACRA and QPP?
A: The Quality Payment Program (QPP) under MACRA modifies payments based on quality and cost performance, but starts from this base calculation.