Conversion Factor
The dollar value multiplied by the geographically-adjusted Relative Value Unit to determine the Medicare-allowable amount for a service.
1 min read · Last reviewed May 23, 2026
At a glance
- Category
- Billing
- Primary sources
- 1
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Where this comes up
This shows up in revenue-cycle work — claim scrubbing, charge entry, posting, A/R follow-up, and month-end close. Billers and practice managers hit this term when reconciling a payment, working a denial queue, or auditing why a claim aged past 60 days.
Full definition
What it is in practice
CMS publishes the Conversion Factor (CF) in the annual PFS final rule. Annual CF changes have been a perennial battleground because they cascade across every code.
How it shows up in your practice
Forecast revenue under the next year's CF before the final rule. Commercial contracts often peg rates to a multiple of Medicare; CF cuts ripple downstream.
Sources
- CMS — Physician Fee Schedule (PFS)https://www.cms.gov/medicare/payment/fee-schedules/physician
Check the current Conversion Factor in Ask D3
Open ask d3 →Related terms
- BillingPhysician Fee Schedule (PFS)The CMS Medicare reimbursement schedule for physician and certain non-physician practitioner services, published annually.
- BillingRVU (Relative Value Unit)The basic unit of measure used in the Medicare Physician Fee Schedule, composed of work, practice expense, and malpractice components.
- BillingGeographic Practice Cost Index (GPCI)Geographic adjusters applied to each RVU component to reflect local cost variation in physician work, practice expense, and malpractice.
D3rx is a healthcare-billing and compliance research aid maintained by D3rx Inc. Articles are drafted by an LLM (Anthropic Claude) against primary HHS, OCR, CMS, eCFR, NIST, and state-regulator publications, and reviewed for restraint and source fidelity by the D3rx team.
Reviewer status: a named credentialed reviewer (CHC, CHPC, or healthcare attorney) is being engaged. Until that engagement is finalized, this page does not claim credentialed review.
Related across the archive
- GlossaryGeographic Practice Cost Index (GPCI)Geographic adjusters applied to each RVU component to reflect local cost variation in physician work, practice expense, and malpractice.
- GlossaryPhysician Fee Schedule (PFS)The CMS Medicare reimbursement schedule for physician and certain non-physician practitioner services, published annually.
- GlossaryRVU (Relative Value Unit)The basic unit of measure used in the Medicare Physician Fee Schedule, composed of work, practice expense, and malpractice components.
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This glossary entry is a research aid for billing and compliance staff. It does not provide legal, medical, or financial advice and does not replace counsel. References cited link to primary sources at HHS, OCR, CMS, eCFR, NIST, and the relevant payer or industry body.