Why payers price this way Copy link
Medicare's PFS formula already produces a published, code-by-code amount for nearly every service. Rather than negotiate thousands of individual fees, commercial payers start from that schedule and apply one multiplier (or a few, by service category) across the board. What the payer and the practice actually negotiate is the multiplier, not the underlying Medicare rate.
Where the number actually lives Copy link
The multiplier is written into the reimbursement or fee-schedule exhibit of the signed payer contract. It won't appear on a remittance advice or portal summary, so you have to read it from the contract itself, or request it from the payer if the practice never kept a copy. Look for language like "Medicare Physician Fee Schedule multiplied by X%" or a rate table with a header referencing "% of Medicare" or "% of CMS."
A vintage often comes attached Copy link
Contracts often tie the multiplier to a fixed year's schedule ("105% of 2023 Medicare rates") rather than the current one. In that case a new CMS release does not change what the contract pays until it is renegotiated or the reference year rolls forward under the contract's terms. The year a contract names matters as much as the percentage.
Checking your own multiplier Copy link
Once you have a multiplier and a reference year, checking whether a payer is actually paying it is arithmetic: take the Medicare non-facility amount for the code and reference year, multiply by the percentage, and compare it to the remittance. A code page's contracted-rate table shows several common multipliers at once; the calculator lets you enter your exact one and compare it against an actual paid amount.
Percent-of-Medicare calculator Copy link
Start from the Medicare amount for the code (from any code page on this site, matching the setting and year your contract references). At 115% of a $79.23 Medicare rate, the contracted allowed amount is $79.23 × 1.15 = $91.11. Or work backwards: a payer that paid $95.00 against that rate is paying at $95.00 ÷ $79.23 ≈ 119.9% of Medicare.
To have the Medicare amount looked up for you—by code, date of service, locality, and setting—use the expected-payment calculator.
Frequently asked Copy link
Is "% of Medicare" the same for every code in a contract?
Not always. Many contracts use one blanket multiplier across the fee schedule, but some carve out different percentages by service category (for example, surgery versus evaluation and management visits). Check the contract's fee exhibit for category-specific rates before assuming one number applies everywhere.
What if I don't know my contract's percentage?
Compare a few recent remittances for common codes against the Medicare amount for the same code, locality, and date of service to back into the effective percentage, or request the fee-schedule exhibit from your provider relations contact—payers are generally required to make it available on request.
Does the percentage apply to the facility or non-facility rate?
It depends on the contract and where the service was performed. Most contracts that reference "the Medicare rate" mean whichever setting (facility or non-facility) matches how the claim was billed, so compare against the Medicare amount for that setting.
Sources Copy link
Written from primary CMS sources—see how we source, compute, and verify everything on this site.
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