What is a fee schedule?
A fee schedule lists what a payer pays for each procedure code. Medicare publishes its own; commercial contracts set rates directly or as a percentage of Medicare.
Contract rates, Example Health Plan
- Contract term
- 125% of the current Medicare physician fee schedule
| Code | Medicare rate | Contract rate |
|---|---|---|
| 99213 | $90.00 | $112.50 |
| 99214 | $128.00 | $160.00 |
| 20610 | $76.88 | $96.10 |
- Rates shown are illustrative. When Medicare updates its fee schedule, every rate in this contract changes with it, and the payer's system has to as well.
Every payment a payer makes is priced from a fee schedule. For Medicare, the physician fee schedule assigns relative value units to each code and converts them to dollars, adjusted by location. Commercial payers often price their contracts as a percentage of Medicare, or list their own rates.
Why it matters
The fee schedule is the only way to know whether a payment was right. Without it loaded and current, an underpayment looks exactly like a correct payment.
Keeping it current
Medicare’s rates change every year and sometimes mid-year. Contracts tied to them change too, and so do payer systems, sometimes late or wrongly. Each contract’s rates, effective dates and special terms, such as carve-outs, multiple-procedure rules and lesser-of clauses, need to be kept where the payment check can use them.
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