The Medicare Physician Fee Schedule is the basis by which Medicare pays for health care services delivered by practitioners. The schedule lists payment rates for more than 7,000 services. The schedule is produced by the Centers for Medicare & Medicaid Services and its rates are updated annually. The reimbursement rates are not as simple as a dollar amount for a given procedure. Instead, the schedule takes into consideration factors such as the patient’s region and the setting at which the care was delivered.
Medicare’s Physician Fee Schedule is updated with input from an advisory committee representing physician organizations. Within the schedule, factors such as the amount of work and practice expenses are incorporated into the rate paid for a treatment, rather than the underlying value of a service. Among the concerns regarding this model is the potential for a compensation bias toward specialty care.
Medicare’s Physician Fee Schedule determines payments to a variety of health care providers within the Medicare system, including physicians and non-physician practitioners such as nurses. While CMS’s Physician Fee Schedule applies to Medicare, the schedule influences the reimbursement rate in other insurance spheres, such as private commercial insurance for individuals and families and employer-based health plans.