Updated approximation of the most recent historical year.

Dollars and cents amount that is established for one unit as applied to a service rendered or product furnished. This unit (sometimes called a conversion factor) is then used to convert various services/procedures into fee-schedule payment amounts by multiplying the relative value unit by the conversion factor (base payment amount). It establishes the level of the payment rates in the payment system.

Basic health insurance plan that gives limited first-dollar hospital, surgical, or medical benefits as compared with major medical benefit plans that provide comprehensive hospital, surgical, and medical coverage.

Dollar amount assigned to a hospital that assists in adjusting diagnosis-related group (DRG) payment. The base rate takes into account the hospital’s geographic location, status (urban, rural, teaching), and local labor costs.

Value that is determined by taking fees, work, and cost of a group of services or procedures to develop a relative value scale for payment. Also referred to as basic value .

Medicare phrase that means the amount a hospital actually spends to provide care in a prior time period. Usually the base year is the fiscal year that ends on or after September 30, 20XX, and before September 30, 20XX, of the next year.

For Social Security benefits, wage earner’s years after 1950 up to the year of entitlement to retirement or disability insurance benefits. For a survivor’s claim, the base years include the year of the worker’s death.