Fee Schedule

A complete listing of fees and reimbursement rates that an insurance payer will pay for specific medical services and procedures, forming the basis of payment terms in provider contracts.

A fee schedule is the list of reimbursement rates that a payer will pay you for each service you provide. When you sign a contract with a payer as a participating provider, the fee schedule is part of that contract. It tells you exactly how much you will be paid for each CPT code. Fee schedules vary significantly between payers. Medicare publishes its fee schedule publicly (the Medicare Physician Fee Schedule, or MPFS). Most commercial payers base their rates on a percentage of Medicare rates, but the percentages vary. One payer might pay 110% of Medicare for a particular service, another might pay 85%. Some payers negotiate rates individually with each provider or group. Understanding your fee schedule before you sign a payer contract is critical. Too many providers sign contracts without reviewing the fee schedule and then discover they are getting paid below their cost of providing the service. Look at the rates for your most commonly billed codes and compare them to Medicare rates and to what other payers in your area are paying. Fee schedules are not static. Payers update them, sometimes annually, sometimes more frequently. Medicare updates its fee schedule every January. Your contract should specify how and when the payer can modify the fee schedule and what notice they need to give you. If you are in a group practice, the group's fee schedule may differ from what an individual provider would negotiate. Larger groups typically have more bargaining power to negotiate higher rates. If your practice is joining a new payer network, the fee schedule negotiation happens during the contracting phase, which comes after credentialing is complete.