Medicare PFS guides
Practical guides to Medicare Physician Fee Schedule payment — the PFS formula, facility vs non-facility rates, sequestration, and percent-of-Medicare contracts.
Sequestration
Sequestration is an across-the-board reduction — commonly about 2% — applied to Medicare payments after the fee schedule amount is calculated. It is applied to...
Facility vs non-facility
Medicare pays a different amount for the same code depending on where the service is performed. The non-facility rate applies in settings like a physician’s off...
PFS payment formula
Medicare’s Physician Fee Schedule turns a code into a payment with one formula: multiply each RVU component by its geographic index, add them, and multiply by t...
Percent of Medicare
Most commercial payer contracts price physician services as a percentage of the Medicare Physician Fee Schedule amount rather than negotiating a dollar figure c...
2026 conversion factor
Starting with the CY2026 Physician Fee Schedule, there is no longer a single national conversion factor — CMS now publishes two: a higher rate for clinicians wh...
HCPCS vs CPT
CPT and HCPCS are not competing code sets — CPT is Level I of HCPCS. When people contrast "HCPCS vs CPT" they usually mean the alphanumeric Level II codes (like...
Checking a medical bill
Every practice sets its own charges, so there is no master price list to compare a bill against. What you can do is run three checks that catch most billing pro...
For plain-language definitions of individual terms, browse the glossary — or see a rate computed end-to-end in the expected-payment calculator.