The Medicare fee schedule is a very influential fee schedule used in the US. So it's worth taking a look at it so you're familiar with it and some of the things associated with it. Medicare is the US government payer that provides care mainly to people over age 65. A significant amount of Medicare's payments to physicians use a fee schedule which Medicare developed. The Medicare fee schedule is based around the HCPCS system. So it uses that enumeration of services. And at the core of that is the CPT listing of physician services. Now, a central idea in the Medicare fee schedule is that each service in there should be assigned a weight, if you will, that reflects the amount of work involved in doing the service, the expenses a practice might incur to provide it and the amount of malpractice risk associated with it. If each service has a weight, the thinking goes, then those weights can be used to assign allowed payment amounts for each service in a reasonable and hopefully rational way. So at the heart of the Medicare fee schedule is a system of weights like this for every service, which we give a name. We call them relative value units, or RVUs. One service might have two RVUs assigned to it, another might have four. And that's supposed to mean that the latter, the one with four, should get twice as much weight in terms of the amount of work it takes, the practice expense, and the malpractice risk involved for the practice. This was a really involved process creating this thing, quite a lot of work. Lots of people worked through thousands of services to come up with the RVU the values. It's commonly used today, but it's not without some debate and controversy still from time to time. It can be hard to come up with and maintain numeric RVU values for all these services that everybody agrees with. But they did come up with it, and they do try to keep it maintained over time and keep up with new developments. So then the Medicare fee schedule has all these enumerated services and the number of RVUs associated with each one. And then there's a conversion factor that converts the RVUs for payments. So let's say a service has two RVUs. If the conversion factor's $35, then the Medicare allowed amount would be two times 35, or $70 for that service. If a service gets 4 RVUs, the allowed amount would be four times 35. An interesting thing about the Medicare fee schedule is that it was made by the government and its components are largely publicly available. You can download, online, and examine all these pieces. Now Medicare, of course, uses this system for lots of its payments to physicians. And so you'll pretty commonly encounter it in the US for this reason, but it has come to have influence way beyond just Medicare. Since it was created and made available to the public, many private insurers have also come to use this as the basis for their fee schedules and the fees that they'll pay physicians. It's very common for a private insurance company that wants to use fee-for-service to just go take the Medicare fee schedule and go out and negotiate with physicians around that fee schedule. So you'll hear, for example, that maybe somebody has an arrangement with a private insurance company where they get paid 120% of Medicare's rates, something like that. That would probably be a case where the Medicare fee schedule was used in the negotiation and the agreement is to pay a little bit more, 20% more, than Medicare pays for each service. Private insurers can take this structure, not have to develop their own and then negotiate over the specific rates, which makes the Medicare fee schedule a big deal in fee-for-service payment, in the US at least.