2010 Medicare Conversion Factor = $36.0846 $36.8729 [NOTE: On June 25, 2010, the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010” increased the 2010 Medicare conversion factor by 2.2% retroactive to June 1, 2010 through November 30, 2010.]

Additional components of theMedicare RBRVS physician fee schedule factored into the payment structure include the following:

  •  MEI: The allocation of RVUs to pools for physician work, practice expense, and professional liability insurance have been revised to correspond with the Medicare Economic Index. Work is now allocated 52% of the total RVUs, practice expense is 44%, and professional liability insurance is 4%.
  • HPSA: Incentive payments for physician services provided to patients in Health Professional Shortage Areas (HPSAs), which are medically underserved communities, urban and rural locations that have a documented shortage of medical professionals.
  •  Nonparticipating Physicians: Reduced payments for physicians, called “nonparticipating” physicians, who do not accept Medicare “assignment.” The law sets the payment amount for nonparticipating physicians at 95% of the payment amount for participating physicians (ie, the fee schedule amount).
  •  Budget Neutrality: Statutory guidelines indicate that revisions to the RVUs for physician services may not alter physician expenditures within the Medicare RBRVS physician fee schedule by more than $20 million from the principal expenditures that would have resulted if the RVU adjustments were never initiated. In 2007 and 2008, the Medicare program applied a separate budget neutrality adjustment factor to the physician work RVUs to ensure Medicare budget neutrality in light of work RVU increases tied to the 2005 Five-Year Review. However, by virtue of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), starting in 2009 CMS is required to maintain Medicare budget neutrality exclusively via annual adjustments to the Medicare Conversion Factor.