Physician services are paid through a fixed fee schedule, charges for which are based on three key Resource-Based Relative Value Units (RBRVUs). The RBRVU system fixes a national value for each procedure code, based on the sum of the RBRVUs associated with:
* The physician ’ s time, intensity, and technical skill required to render a service
* The practice ’ s overhead expenses, such as rent, office staff salaries, and office supplies
* Malpractice insurance premiums
RBRVUs are established locally to allow for variations in practice costs among geographic areas, and each pricing locality for a given state has a Geographic Practice Cost Index (GPCI) for each RBRVU.
Physician fee schedules for all Medicare Part B carriers are calculated using one national Conversion Factor (CF). Congress determines the CF each year, considering the projected inflation rate, pro- jected vs. actual claims volumes, Medicare enrollment changes, and other factors potentially impact- ing the Medicare Part B budget.