What is Fee Schedule in Medical Billing

The Centers for Medicare and Medicaid Services (CMS) define the fee schedule as “a complete listing of fees used by Medicare to pay doctors or other providers/suppliers.  This comprehensive listing of fee maximums is used to reimburse a physician and/or other providers on a fee-for-service basis.”  CMS has developed fee schedules for “ambulance services, clinical laboratory services, durable medical equipment, physicians, prosthetics, orthotics, and supplies.”

One can use the Medicare Physician Fee Schedule Look-up Tool to find the correct fee-schedule.

Searchable Physician Fee Schedule Tool

The purpose of MPFS is to allow participating institutional providers, health care professionals, and suppliers to find the payment amount set by Medicare for various codes. This allows the MPFS users to calculate the beneficiary coinsurance amount. As for nonparticipating health care professionals/suppliers the MPFS provides with the limiting charge.

The Medicare Physician Fee Schedule (MPFS) is designed to provide information for more than 10,000 services, along with fees, the associated Relative Value Units (RVUs), and various payment policies. In the manual How to Use the Searchable Medicare Physician Fee Schedule (MPFS) the Centre for Medicare and Medicaid Services (CMS) mentions that the fee schedule is used by Medicare to pay for the following services:

• Diagnostic tests (other than clinical laboratory tests)
• Institutional providers such as hospitals, Comprehensive Outpatient Rehabilitation Facilities (CORFs), and Skilled Nursing Facilities (SNFs)
• Mammography Centers (suppliers)
• Professional services of physicians and other enrolled health care professionals in private practice
• Radiology services
• Services covered incident to physicians’ services (other than certain drugs covered as incident to services)

Physician services included in the Medicare Physician Fee Schedule (MPFS) are anesthesia services, a range of other diagnostic and therapeutic services, office visits, and surgical procedures. The services can be furnished in ambulatory surgical centers, beneficiary’s home, clinical laboratories, hospices, hospitals, outpatient dialysis facilities, Skilled Nursing Facilities, and other post-acute care settings.

Before reviewing the fee schedule it is important that you know the definition of status indicators. Knowing the status indicators beforehand helps in avoiding avoid any confusion while referring to a particular code/service.

The following are the status indicators used by CMS to indicate various purposes:

• A = Active code. These codes are separately paid under the physician fee schedule, if covered.
• B = Bundled code. Payment for covered services is always bundled into payment for other services not specified.
• C = MACs priced code. MACS will establish RVUs and payment amounts for these services, generally on an individual case-by-case basis following review of documentation such as an operative report.
• E = Excluded from physician fee schedule by regulation. These codes are for items and/or services that CMS chose to exclude from the fee schedule payment by regulation.
• I = Not valid for Medicare purposes. Medicare uses another code for reporting of, and payment for, these services. (Code is NOT subject to a 90-day grace period.)
• M = Measurement codes. Used for reporting purposes only.
• N = Non-covered service.
• P = Bundled/excluded codes. There are no RVUs and no payment amounts for these services. No separate payment is made for them under the fee schedule.
• R = Restricted coverage. Special coverage instructions apply.
• T = Paid as only service. These codes are paid only if there are no other services payable under the physician fee schedule billed on the same date by the same provider.
• X = Statutory exclusion. These codes represent an item or service that is not in the statutory definition of ‘physician services’ for fee schedule payment purposes.