Guide · Updated Aug 7, 2026

What Is a Fee Schedule?

A fee schedule is the complete list of amounts a payer will pay for covered services — one allowed amount per billing code. Medicare's version, the Physician Fee Schedule, is the most-referenced one in the country, and unlike a flat price list it computes each amount from the code's relative value units, adjusted for where the service was performed.

What a fee schedule is Copy link

A fee schedule pairs every billing code a payer covers with a single allowed amount — the most the payer will recognize for that service before the patient's share is worked out. It is a price list keyed to codes rather than to services described in words, which is why one code means the same line item to every provider and payer that uses it. Medicare, state Medicaid programs, and commercial insurers each publish or negotiate their own.

Medicare's is computed, not just listed Copy link

Most fee schedules are flat tables: a code and a dollar amount someone set. The Medicare Physician Fee Schedule is different — each amount is produced by a formula. Every code carries work RVU, practice expense RVU, and malpractice RVU values that are multiplied by a geographic index for the payment locality and then by a single national conversion factor. That is why a Medicare rate moves with the locality and the year instead of being one fixed number — see it computed line by line in the PFS formula, or on any code page, for example CPT 99213.

Not every code has one price Copy link

A fee schedule can list a code without setting a national price for it. On the PFS, a code's status indicator decides whether a payable national amount exists at all: carrier-priced codes are set by the local Medicare contractor, and other codes are bundled into another service and never paid separately. A blank value on those rows is not a price of zero — it means the schedule defers the number elsewhere.

The same code, a different schedule for each payer Copy link

Because codes are shared, payers can price the same service off one another. State Medicaid programs publish their own fee schedules, usually well below Medicare. Commercial insurers rarely build one from scratch — most contracts set rates as a percentage of the Medicare amount ("115% of Medicare"), which makes the Medicare fee schedule the benchmark everyone else is measured against, even when it is not the payer.

Why the version matters Copy link

A fee schedule only means something with a date attached. Medicare republishes the PFS every year through a final rule and updates the underlying conversion factor and relative value files on a quarterly cycle, so "the Medicare rate" for a code is really the rate in a specific release. Looking up a past rate — what a code paid in a given quarter and locality — depends on that versioning, which is why every amount here is stamped with the release that produced it.

Frequently asked Copy link

What is a fee schedule in medical billing?

It is the list of amounts a payer will pay for each covered service, one allowed amount per billing code. Providers submit codes, and the fee schedule sets the recognized amount before the patient's deductible, copay, and coinsurance are applied.

Is the Medicare fee schedule the same across the country?

No. The national Physician Fee Schedule amounts are adjusted by a geographic index for each payment locality, so the same code pays different amounts in different areas. There is a national figure, but the amount actually paid is localized.

Does a fee schedule set what a patient owes?

Not directly. It sets the allowed amount for the service; what the patient owes is their share of that amount — deductible, coinsurance, and copay. The fee schedule is the benchmark for the total recognized price, not the patient's bill.

Sources Copy link

Written from primary CMS sources — see how we source, compute, and verify everything on this site.

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