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A widely anticipated event every summer is the Center for Medicare and Medicaid Services' (CMS) release of its proposed physician fee schedule for the following year—which, once finalized, will determine payment rates for physical therapists (PTs) and other health care providers. (The proposed rule for 2020 has been released, and after CMS considers comments from stakeholders—including APTA—a final rule will be announced before the end of the year.)

One aspect of the fee schedule is the values of the various Current Procedural Terminology (CPT) codes that health professionals use to report the services they provide. Since these values affect how much PTs will be paid in the coming year, members often ask how they are determined.

The federal government uses a standardized provider payment schedule based on what is called a resource-based relative value scale (RBRVS). In the RBRVS system, payments are determined by the various costs needed to provide each service identified by a CPT code. The cost is divided into 3 parts: provider work, practice expense, and professional liability insurance. Each part is assigned a certain number of units, called relative value units (RVUs). Payments are calculated by multiplying these combined units by a conversion factor (a monetary amount determined annually by CMS), and adjusting for geographical differences that affect costs.

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  1. The Federal Register / Vol. 60, No 143 / Wednesday, July 26, 1995, page 38414. https://www.govinfo.gov/content/pkg/FR-1995-07-26/pdf/95-18144.pdf. Accessed June 17, 2019.
  2. American Medical Association. RVS Update Committee. Chicago, IL. https://www.govinfo.gov/content/pkg/FR-1995-07-26/pdf/95-18144.pdf. Accessed June 17, 2019.
  3. Development of a Model for the Validation of Work Relative Value Units for the Medicare Physician Fee Schedule. https://www.govinfo.gov/content/pkg/FR-1995-07-26/pdf/95-18144.pdf. Accessed June 17, 2019.

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