What Are Medicare Reimbursement Rates for CPT Codes?
- Medicare uses a system of CPT and HCPCS codes to reimburse health care providers for their services. Learn how to look up these codes to find out Medicare reimbursement rates.
A Medicare reimbursement rate is the amount of money that Medicare pays doctors and other health care providers for the services and items they administer to Medicare beneficiaries.
CPT codes are the numeric codes used to identify different medical services, procedures and items for billing purposes. When a health care provider bills Medicare to seek reimbursement, they will use CPT codes to list the various treatments they delivered.
The CPT codes used to bill for medical services and items are part of a larger coding system called the Healthcare Common Procedure Coding System (HCPCS).
CPT codes consist of 5 numeric digits, while HCPCS codes are an alphabetical number followed by 4 numeric digits.
What Is the Average Medicare Reimbursement Rate?
The Medicare reimbursement rate varies according to the service or item being provided as well as the type of health care provider that is delivering the care and other factors.
Medicare’s reimbursement rate is typically less the amount that is billed to and reimbursed by a private health insurance company. In fact, Medicare’s reimbursement rate is generally around only 80% of the total bill as the beneficiary is typically responsible for paying the remaining 20% as coinsurance. Medicare predetermines what it will pay health care providers for each service or item. This cost is sometimes called the allowed amount but is more commonly referred to as the Medicare-approved amount.
Certain health care providers maintain a contract agreement with Medicare that allows them to charge up to 15% more than the Medicare-approved amount in what is called an “excess charge.”
How Do I Find Medicare Reimbursement Rates?
You can learn about how to use the Medicare Physician Fee Schedule (MPFS) to look up Medicare reimbursement rates by downloading a PDF of the Physician Fee Schedule Guide.
You can also find Medicare reimbursement rates if you know the CPT or HCPCS code for the service or item being billed and have access to the Medicare Physician Fee Schedule, which is essentially a master list of all reimbursement rates. The MPFS is updated on a quarterly basis to reflect the most recent changes to reimbursement rates.
To find the CPT or HCPCS billing code, look on the bill provided to you by your health care provider. You may also download a zip file of the 2021 HCPCS codes, then select the “January 2021 Alpha-Numeric HCPCS File (ZIP).”
You can search the MPFS on the federal Medicare website to find out the Medicare reimbursement rate for specific services, treatments or devices. Simply enter the HCPCS code and click “Search fees” to view Medicare’s reimbursement rate for the given service or item.
You may enter up to five codes at a time or a range of codes. You may also select either the national payment amount or a specific Medicare Administrative Contractor (MAC), as reimbursement rates can vary within specific localities.
The information displayed will include:
- Pricing amounts: The maximum fee for the given code
- Payment Policy Indicators: Global surgery days, multiple surgery indicators and applicability of professional and technical components
- Relative Value Units (RVUs): Information about how the payment amount was calculated including work, practice expense and malpractice costs
- Geographic Practice Cost Index (GPCI): A reflection of geographic differences that affect reimbursement rates
Why Should I Look Up Medicare Reimbursement Rates?
It’s a good idea for Medicare beneficiaries to review their medical bills in detail. Medicare fraud is not uncommon, and a quick check of your HCPCS codes can verify whether or not you were correctly billed for the care you received.
Looking up the reimbursement rates can also help you calculate how much you can expect to be billed for using the standard 20% coinsurance rate that applies to most services and items covered by Medicare Part B.
For questions about your Medicare claims, bills or costs, call 1-800-MEDICARE (1-800-633-4227).