Which statement correctly describes how Medicare physician payment is built under RBRVS for a typical CPT service?
Select an answer to reveal the explanation.
Short Explanation
RBRVS is a recipe: three RVU flavors—work, practice expense, and malpractice—seasoned by geography (GPCI) and multiplied by the conversion factor. It is not “whatever you charged” and not diagnosis-weight magic. Know those building blocks and the payment story makes sense.
Full Explanation
Under the Resource-Based Relative Value Scale, Medicare physician fee schedule payment for most CPT services is derived from physician work, practice expense, and malpractice RVUs, adjusted by Geographic Practice Cost Indices and multiplied by the annual conversion factor. Understanding these components helps explain payment differences across services and localities. Billed charges, diagnosis weights alone, or a single unadjusted flat fee without RVUs do not describe the RBRVS model.