How the RUC and HCPAC Influence Payment for Physical Therapist Services

The Relative Value Scale Update Committee, or RUC, recommends Relative Value Unit values to CMS for new, revised, and potentially misvalued codes. The 32-member RUC, which meets three times per year, is composed primarily of physicians, along with one nonphysician representative from the Healthcare Specialty Professional Advisory Committee, or HCPAC.

The HCPAC operates alongside, but separately from, the RUC and represents nonphysician qualified healthcare professionals within the Resource-Based Relative Value Scale system. HCPAC is responsible for reviewing codes that predominantly pertain to nonphysician services and are submitted by specialty societies, including APTA.

HCPAC is composed of 13 member organizations representing a diverse array of healthcare disciplines, including physical therapy, occupational therapy, speech-language pathology, audiology, dietetics, social work, podiatry, psychology, physician assistants, optometry, chiropractic care, marriage and family therapy, and advanced practice registered nursing. Three physician RUC members also serve on HCPAC.

The RUC, HCPAC, and the CPT Editorial Panel processes are convened by the American Medical Association. Each professional society or association that is a member of the CPT panel and the RUC nominates an advisor and an alternate advisor to represent the association. These advisors and alternate advisors attend each of the three CPT and RUC meetings each year and are called upon to explain or defend the suggested code reviews and valuations.

APTA is the only national physical therapy organization positioned to develop and submit survey data to the RUC for CPT valuation, giving members influence in the RUC process and, ultimately, in the valuation of a CPT code. APTA engages in the AMA RUC survey process by identifying a random sample of members to complete a detailed survey of  services or procedures represented by the CPT code to obtain information about time, intensity, supplies, and equipment. APTA then submits recommendations to RUC or HCPAC for review. 

How Relative Value Units Are Calculated: RVU Components Explained

RVUs consist of three components:

1. Work RVU
2. Practice expense RVU
3. Professional liability (Malpractice) RVU

Each component is adjusted for geographic differences using Geographic Practice Cost Indices, or GPCIs, and then all three are added together to produce a total RVU, which is then multiplied by the conversion factor from the Medicare Physician Fee Schedule. The conversion factor is a CMS scaling factor to adjust Medicare payment amounts that is updated yearly.

The RVU Formula

Total RVUs =

(Work RVU x Work GPCI) +

(Practice expense RVU x Practice expense GPCI) +

(Malpractice RVU x Malpractice GPCI)  

Total RVUs X Conversion Factor = Total Medicare Payment Per Code

Previous APTA resources have broken down the work component, which accounts for 51% of total RVUs and consists of provider time, technical skill and effort, mental effort and judgment, and psychological stress.

Practice expense accounts for about 45% of the total relative value of each service, and the Malpractice expense accounts for 4%.

There are two types of practice expenses: direct and indirect. Direct practice expense includes costs such as medical supplies and equipment, and clinical staff time. These can be thought of as items that are used for an individual patient for a certain service. Indirect practice expense includes items like rent, administrative staff, billing and IT systems, or items used across multiple services.   

Malpractice RVUs reflect the cost of professional liability insurance.

Each component is then multiplied by the relative cost across various geographic areas. Rural area GPCIs tend to be lower than urban GPCIs, reflecting the generally lower costs of providing care in rural settings.

Example: Calculating RVUs Using Therapeutic Exercise CPT 97110

Using data from the 2026 Medicare Physician Fee Schedule and GPCI Data Set, assume the following values for Los Angeles, California:

CPT 97110 = $33.40

Work RVU = 0.45; Work GPCI = 1.041

Practice Expense RVU = 0.41; Practice Expense GPCI = 1.183

Malpractice RVU = 0.01; Malpractice GPCI = 0.664

(0.45 x 1.041) = 0.468

(0.41 x 1.183) = 0.485

(0.01 x 0.664) = 0.007

Total RVUs = 0.468 + 0.485 + 0.007 = 0.96

 0.96 x conversion factor of 33.40 = $32.73.

Therefore, one unit of 97110 would result in a Medicare payment of about $32.73.

How MPPR Reduces Payment for Physical Therapist Services

One important item to note when discussing RVUs is the Multiple Procedure Payment Reduction. MPPR reduces the practice expense component value by 50% for subsequent CPT codes or units of codes deemed “always therapy” furnished in the same session. Some of the codes considered “always therapy” codes include PT evaluation, neuromuscular reeducation, manual therapy, and gait training. 

In the example above, the formula would be:

(0.45 x 1.041) = 0.468

(0.5) x (0.41) x (1.183) = 0.243

(0.01 x 0.664) = 0.007

Adjusted RVUs = 0.468 + 0.243 + 0.007 = 0.718

0.718 x conversion factor of 33.40 = $23.98

Payment = 0.718 x 33.40 = $23.98 for each subsequent use of 97110 or each additional therapy service provided in the session. This is a decrease of more than $8.00 compared to the first service provided in the session.

APTA has been hard at work advocating for the repeal of MPPR, most recently through the introduction of the RECOVER Act on April 20, 2026.

For further information, watch APTA’s course on this topic in the APTA Learning Center.

Glossary

American Medical Association, or AMA: Entity that convenes the RUC, HCPAC, and CPT Editorial Panel.

Current Procedural Terminology, or CPT: Codes billed to insurers to describe a clinician’s procedure.

Geographic Practice Cost Index, or GPCI: Used to adjust payment component based on the location of practice.

Health Care Professionals Advisory Committee, or HCPAC: Group comprised primarily of nonphysician providers that reviews and values codes that pertain primarily to nonphysician services. Operates alongside RUC.

Multiple Procedure Payment Reduction, or MPPR: Payment policy designed to avoid duplicate payment for practice expenses when multiple procedures or multiple units of the same procedure (per CPT code) are furnished to the same patient on the same date of service. (APTA has strongly opposed the MPPR policy since its implementation in 2011.)

Relative Value Unit, or RVU: A metric used to determine the reimbursement for a service that reflects the assigned work expense, practice expense, and professional liability expense.

Resource-Based Relative Value Scale, or RBRVS: The system used by CMS to assess the value of each billed medical code.