The CMS Physician Fee Schedule does not apply one uniform geographic adjustment. Each of the three RVU components, work, practice expense, and malpractice, carries its own GPCI. Work GPCI reflects regional differences in physician cost-of-living. Practice expense GPCI reflects local staff wages and real estate costs. Malpractice GPCI reflects local insurance premiums, which vary significantly by state. A physician in Manhattan will have a higher PE GPCI but may have a similar wGPCI to a physician in rural Kansas.
The formula applies each GPCI only to its matching component before summing adjusted RVUs and multiplying by the conversion factor. This means the same CPT code can produce materially different allowables depending on locality, not just a uniform percentage shift from the national average.
Worked example, CPT 99214 in Chicago (non-facility) vs national average:
Disclaimer: This calculator shows the Medicare allowable, not the actual remittance. Medicare pays 80% of the allowable after deductible. Verify with your payer contract for actual reimbursement.
Medicare's total RVU includes three components, work, practice expense, and malpractice, but physician employment contracts almost universally use only the work RVU (wRVU) for incentive compensation. The reason is straightforward: practice expense RVU covers overhead the health system controls, and malpractice RVU reflects institutional insurance costs. Paying physicians on total RVU would reward them for factors they have no influence over.
A typical primary care employment structure sets a base salary corresponding to a wRVU threshold (e.g., 4,500 wRVUs annually) and then pays a per-wRVU rate for production above that threshold. MGMA benchmarks national per-wRVU rates by specialty. Primary care averages roughly $52–$58 per wRVU. Surgical specialties can exceed $100 per wRVU.
| CPT Code | wRVU | Total RVU | wRVU % of Total |
|---|---|---|---|
| 99213 (Level 3 OV) | 1.30 | 2.35 | 55% |
| 99214 (Level 4 OV) | 1.92 | 3.43 | 56% |
| 99215 (Level 5 OV) | 2.80 | 4.73 | 59% |
| 99203 (New Patient L3) | 1.60 | 3.36 | 48% |
| 99232 (Hospital Follow) | 1.39 | 2.49 | 56% |
| 99233 (Hospital Follow) | 2.00 | 3.53 | 57% |
For an employed physician tracking productivity, the wRVU per visit is the number that matters for compensation modeling. Total RVU determines Medicare reimbursement to the practice; wRVU determines whether you exceed your incentive threshold. Confusing the two when evaluating an employment offer is a common and costly mistake.
Researches and verifies the formulas, methodology, and source data behind each calculator on CalculatorFlux. All tools are built and checked against the cited references before publication.