Medicare Fee Schedule

Medicare is a government administered health insurance program for individuals over age 65 and those with disabilities. Persons with Medicare Part A coverage are covered for hospitalizations and nursing facility care. There is no premium or co-payment for these services. Medicare also offers additional health care coverage including Part B which covers doctors visits and outpatient procedures. Part C coverage is provided by private insurers approved by Medicare, and Part D coverage is prescription drug coverage. With Parts B through D, there are premiums and fees involved.

Medicare, as with all health insurance plans, reimburses physicians and medical facilities for the care they provide to patients. They must impose a limit on the fees they will pay for services and keep them reasonable, therefore there is a Medicare fee schedule.

The medicare fee schedule is set each year and reviewed annually. Every service a patient receives has a set fee that can be charged and reimbursed for that service. The fees not only apply to physicians, but to ambulance services, laboratory tests, and medical equipment.

What does this Mean

When you go to the doctors for an office visit each procedure you have done has a set fee. For example, the exam by the physician has a fee. Then if you need to have a culture done for a test for strep throat, that test has a fee. If you need to have a vaccination, not only does the vaccination have a fee but also the administration of the vaccination by the nurse has a fee.

Each one of these procedures has a code that is set by the Health Care Common Procedure Coding System (HCPCS) and each of these procedures has a fee. This is why when you get a receipt for your office visit, there are hundreds of symptoms, diagnosis’s, and procedures listed on the form with little codes next to them and the items you had done at your visit are circled or check marked. This lets the office know which services to bill the insurance company for.

Now, if doctors could just charge whatever they wanted for each of these services and fees our health care system would be out of control. This is where the Medicare fee schedule comes in.

Fee Schedule

The Medicare fee schedule is set and reviewed annually. The fees are adjusted based on location and region as needed. For example, an office visit in upstate areas of New York might have a set fee of $25 for a 15 minute visit. But in New York City where office space and overhead might cost more, the fee might be $30 for that same 15 minute visit. The fee is the amount that the physician is allowed to charge to the insurance company. This is also sometimes why you get a bill from your doctor or the hospital. If your doctor charges $50 for an office visit, but insurance only covers $30 for the visit, the physician may choose to bill you the additional $20. With the Medicare fee schedule, and Medicare insurance, the patient would not be responsible for that difference.

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