Geographic pricing cost index

Geographic Pricing Cost Index is used along with Relative Value Units by Medicare to determine allowable payment amounts for medical procedures. There are multiple GPCIs: Cost of Living, Malpractice, and Practice Cost/Expense. These categories allow Medicare to adjust reimbursement rates to take into account regional and practice-specific factors.

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The basic calculation for a Medicare allowed amount is:

Appropriate RVUs X Conversion Factor X Appropriate GPCIs

Centers for Medicare & Medicaid Services - Physician Fee Schedule Overview [1]