I will take a shot at answering this one. I have this Study Guide but I may have a different version of it so my data given in the tables may be different. I hope you know that the answers are in the back of the book.
First some background which you may already know, but just so we are on the same page.
The level 5 new patient office visit is CPT code 99205.
RBRVS stands for resource-based relative value scale. From the AMA website: "In the RBRVS system, payments for services are determined by the resource costs needed to provide them. The cost of providing each service is divided into three components: physician work, practice expense and professional liability insurance. Payments are calculated by multiplying the combined costs of a service by a conversion factor (a monetary amount that is determined by the Centers for Medicare and Medicaid Services). Payments are also adjusted for geographical differences in resource costs."
So basically this is an attempt to compensate doctors for a particular procedure in a way that is fair, taking into consideration the intensity of the work (WORK RVU), the expense to the physician to provide the procedure (PE RVU), and medical liability involved for doing the procedure -- (MP - for malpractice). But for each of these components, there is a corresponding geographic expense component, because it costs different amounts to do anything in different parts of the country. This is called the Geographic Practice Cost Index (GPCI).
Step 1: Identify the data we need.
So looking up the CPT code of 99205 in the table the Study Guide provides, we find that this code has the following:
WORK RVU = 3.17
PE RVU = 1.91 (This is from the column for non-facility locations such as a doctor's office. We can ignore the column for Transitioned facility for this example.)
MP RVU = 0.2
But we need to adjust these values for Miami, FL. So there is another table which gives us a GPCI for each of the above components.
Miami's WORK GPCI = 1.000
Miami's PE GCPI = 1.069
Miami's MP GPCI = 3.167
Step 2: Calculate the WORK, PE and MP adjustments for Miami.
We multiple the WORK RVU by Miami's WORK GPCI to determine the "work intensity" for Miami. We multiple the PE RVU by Miami's PE GPCI to determine the "physician expense" for Miami. Likewise, we need to multiple the MP RVU by Miami's MP GPCI to determine the "malpractice liability expense" for Miami. These 3 calculations are as follows.
3.17 * 1.000 = 3.170
1.91 * 1.069 = 2.042
0.2 * 3.167 = 0.633
Step 3: Calculate the Total Geographic adjustment
We add 3 results (from the last step) to get the total of the geographic adjustment:
3.170 + 2.042 + .633 = 5.845.
So, in Miami, a 99205 has a total geographic adjustment of 5.845.
Not every location will have this same value. For example, "NotSoDifficultTown" may have a total geographic adjustment of 3.00, and "SweetEasyTown" may have a total geographic adjustment of 1.00 for doing the same 99205.
Step 4: Figure the dollar amount using the Conversion Factor.
We have to multiply the geographic adjustment (from the last calculation) by the Conversion Factor.
If the conversion factor (CF), which changes every year, is $36.8729 then we have the following:
5.845 * $36.8729 = $215.52
Therefore, the physician in Miami in a non-facility (doctor's office) doing a 99205 would receive $215.52 (for a Medicare patient).
However, in NotSoDifficultTown they would get 3.00 * $36.8729 = $110.62, and in SweetEasyTown the physician would get 1.00 *36.8729 = $36.87. This would be fair because the physician in Miami needs more money to run his practice there, compared to the physician in the other towns.
NOTE
All this is good to understand, but will you get a question like this on the CPC Exam? Personally, I do not think it is very likely from what I've seen in practice exams, etc.
It is good to memorize the 3 components that are needed: Work, PE, MP and that there is a GPCI to take into account the geographic location. And know about the CF, conversion factor that is updated annually, and that it is a dollar amount.
