Hopefully all physicians and other qualified health care professionals know the value of reporting correct codes for services rendered. But it is equally important to have some understanding of how the value of codes affects your practice. Under the current payment system, which is largely based on fee-for-service methodologies, each code is assigned a value. That value, when multiplied by a conversion factor (CF) or contracted rate of payment, should provide payment that covers all costs of providing the service, including overhead and profits necessary to sustain the viability of the practice. Even as payment shifts toward a quality and cost basis, it is likely that the values assigned under the fee-for-service methodology will still affect payment.

Most payers have adopted the values assigned in the Medicare Physician Fee Schedule (MPFS) as a basis for payment. The MPFS is published by the Centers for Medicare & Medicaid Services (CMS) annually....

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