How Medicare actually prices a doctor's visit

A standard 99213 office visit under Medicare pays $28.48, a figure derived from a committee score of 0.87 rather than market negotiation.

The setup

Most people assume medical prices emerge from supply and demand. Medicare prices do not. They emerge from a formula called the Resource-Based Relative Value Scale (RBRVS). The Centers for Medicare & Medicaid Services (CMS) uses this system to determine how much to reimburse physicians for every billed code. The system treats a doctor’s time, their overhead, and their insurance risk as comparable units.

The specific code for a basic established patient visit is 99213. Under the 2024 Medicare Physician Fee Schedule Final Rule published in the Federal Register, this code carries a specific weight. That weight is not determined by how much a patient pays privately or how much a hospital charges. It is determined by the Relative Value Scale Update Committee (RUC), a panel operated by the American Medical Association (AMA). The RUC surveys physicians to estimate how much time and mental effort a procedure requires, then submits those recommendations to CMS. CMS accepts the relative rankings but sets the final dollar value.

The math, briefly

The payment formula has three variables. The first is the total Relative Value Unit (RVU), which sums three components: work, practice expense, and malpractice. The second is the Geographic Practice Cost Index (GPCI), which adjusts the rate for local costs like rent and staff salaries. The third is the Conversion Factor (CF), a national dollar amount CMS sets annually to stay within the overall budget.

For a 99213 visit in 2024, the non-facility RVUs are fixed. Work accounts for the physician’s time and intensity. Practice Expense covers the cost of running the clinic, including equipment and staff. Malpractice covers professional liability insurance. These three numbers sum to a total RVU. That total is then multiplied by the national Conversion Factor.

The table above shows the national average payment. A doctor in a high-cost area like New York City receives a higher payment because their GPCI multiplier is greater than 1.00. A doctor in a rural area receives less. But the underlying score of 0.87 remains the same for the code itself.

The synthesis

The picture reveals that the price is not a negotiation between a doctor and an insurer. It is a policy calculation. The 0.87 score is the core variable. If the AMA RUC decides a 15-minute visit is too undervalued compared to a 30-minute visit, they recommend a change to the Work RVU. CMS can accept or reject that recommendation, but the math remains the same. The system prioritizes internal consistency across thousands of codes over external market forces.

This structure creates a specific tradeoff. The Conversion Factor of $32.74 is budget-neutral. If the RUC recommends increasing the RVUs for a popular service like 99213, CMS must decrease the Conversion Factor or increase the RVUs for less common services to keep the total Medicare spending flat. This means the value of a visit is relative to every other visit in the system. Increasing the price of a 15-minute visit effectively lowers the price of a 60-minute surgery unless Congress appropriates more funding. The $28.48 figure is the result of balancing the cost of 99213 against the cost of every other procedure in the fee schedule.

The closer

The math says a 99213 visit is worth 0.87 relative value units. The policy says each unit is worth $32.74. The result is a payment of $28.48. This specific calculation dictates the reimbursement for millions of visits annually. The tradeoff is not between cost and quality, but between the value of a visit and the value of a surgery. Every dollar CMS pays for a basic office visit is a dollar it cannot pay for a complex procedure without changing the Conversion Factor. The price of a doctor’s time is fixed by the committee score of 0.87, multiplied by the federal budget lever of $32.74.