Medicare yearly conversion factor - 1992 - 2010

The Medicare conversion factor

The Medicare conversion factor is a scaling factor that converts the geographically adjusted number of relative value units (RVUs) for each service in the Medicare physician payment schedule into a dollar payment amount. The initial Medicare conversion factor was set at $31.001 in 1992. Subsequent conversion factor updates have been based on three factors:

•    The Medicare economic index
•    An expenditure target “performance adjustment”
•    Miscellaneous adjustments including those for “budget neutrality”



History of Medicare Conversion Factors

 
Year Conversion Factor % Change Primary Care Conversion Factor % Change Surgical Care Conversion Factor % Change Other Nonsurgical Conversion Factor % Change
1992 $31.0010
N/A
N/A
N/A
1993 N/A


$31.9620
$31.2490
1994 N/A
$33.7180
$35.1580 10.0 $32.9050 5.3
1995 N/A
$36.3820 7.9 $39.4470 12.2 $34.6160 5.2
1996 N/A
$35.4173 -2.7 $40.7986 3.4 $34.6293 0.0
1997 N/A
$35.7671 1.0 $40.9603 0.4 $33.8454 -2.3
1998 $36.6873






1999 $34.7315 -5.3





2000 $36.6137 5.4





2001 $38.2581 4.5





2002 $36.1992 -5.4





2003 $36.7856 1.6





2004 $37.3374 1.5





2005 $37.8975 1.5





2006 $37.8975 0.0





2007 $37.8975 0.0





2008 $38.0870 0.5





2009 $36.0666 -5.3





2010 $36.0791* 0.0










Initially, the Medicare Physician Payment Schedule included distinct conversion factors for various categories of services. In 1998, a single conversion factor was offset by elimination of the work adjustor and increases in the practice expense and PLI RVUs. The reduction in the 2009 conversion factor was offset by elimination of the work adjustor from the third Five-Year
Review.

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