Medicare PFS glossary
Every term behind a Medicare Physician Fee Schedule rate — RVUs, GPCIs, the conversion factor, status indicators, NCCI edits — each defined in plain language from primary CMS sources.
Work RVU
A work RVU measures the relative time, skill, effort, and intensity a physician spends providing a service. It is the first of the three RVU components Medicare...
Practice expense RVU
The practice expense RVU reflects the overhead cost of providing a service — clinical staff time, supplies, equipment, and facility costs. Medicare publishes tw...
Malpractice RVU
The malpractice RVU reflects the relative cost of professional liability insurance for a given service. It is the smallest of the three RVU components but is st...
GPCI
A GPCI is a geographic adjustment factor that scales each RVU component up or down to reflect local cost differences. Medicare publishes three GPCIs per localit...
Payment locality
A payment locality is the geographic area Medicare uses to set the local cost adjustment for the Physician Fee Schedule. Each locality is identified by a Medica...
Conversion factor
The conversion factor is the dollar amount Medicare multiplies by total geographically-adjusted RVUs to produce a payment, updated at least annually. Starting w...
Status indicator
A status indicator is a single-letter code that tells you how Medicare treats a service under the Physician Fee Schedule — whether it is separately payable, bun...
HCPCS
HCPCS is the code set Medicare uses to identify procedures, services, supplies, and drugs. It has two levels: Level I is the CPT code set, and Level II is a set...
CPT
CPT is the numeric code set used to report medical procedures and services. It forms Level I of HCPCS and is maintained by the American Medical Association. Und...
NCCI PTP edit
An NCCI Procedure-to-Procedure (PTP) edit is a CMS rule identifying pairs of HCPCS/CPT codes that generally cannot both be billed for the same patient on the sa...
MUE
A Medically Unlikely Edit (MUE) is the maximum number of units of a HCPCS/CPT code that CMS considers plausible for one patient on one date of service. It is a...
OPPS cap
The OPPS cap limits the Physician Fee Schedule non-facility payment for certain procedures to what Medicare's Hospital Outpatient Prospective Payment System (OP...
Anesthesia base units
Anesthesia services (status J) are not priced with the standard work/practice-expense/malpractice RVU formula. Instead, Medicare pays base units plus time units...
Limiting charge
The limiting charge is the most a non-participating provider can bill a Medicare patient for a service when not accepting assignment: 115% of the non-participat...
For longer-form walkthroughs of how these pieces fit together, browse the guides — or see a rate computed end-to-end in the expected-payment calculator.