Medicare Fee Schedule

As a healthcare provider, understanding the rules and regulations of the Medicare Physician Fee Schedule can be a challenging task. The Medicare Fee Schedule is a comprehensive list of all the fees that Medicare has approved for reimbursing physicians and other healthcare providers for their services. Managing billing and collections effectively is essential to maintaining a healthy medical practice.

In this article, our team at Weave discusses key issues surrounding the Medicare Physician Fee Schedule, including payment policy indicators, fee schedule differences, and how medical billing automation helps streamline patient billing and collections while staying up to date on CMS regulations.

Understanding the Medicare Physician Fee Schedule

Medicare Part B and the Centers for Medicare & Medicaid Services (CMS) use the Medicare Physician Fee Schedule (MPFS) as a policy tool for calculating the total reimbursement cost for patient healthcare and physician services. The fee schedule takes into account three primary factors regarding physician payment rates, known as relative value units (RVUs):

1. Physician Practice Expense (peRVU) includes overhead and maintenance costs, such as supplies, rent, equipment, staff expenses, etc. It also depends on the setting, whether an office (non-facility) or a hospital (facility).
2. Physician Work Service (wRVU) includes the level of time and effort required for each physician service, including the necessary skill level as well as physical and mental effort.
3. Professional Malpractice Insurance (mRVU) includes the cost of malpractice insurance for the physician.

Keep reading as we dig deeper into RVUs, physician fee components, and other variables regarding Medicaid services and fee schedules.

What Healthcare Professionals Need to Know About the Fee Schedule

So, what are the most important details you should know about the CMS fee schedule and your billing process?

Who It Applies To

First, the fee schedules apply to these healthcare providers:

• Primary care physicians
• Durable medical equipment suppliers
• Clinical laboratory services
• Ambulance services

RVUs, GPCIs, and the Medicare Fee Schedule Equation

Calculating expected payment rates under the Medicare Physician Fee Schedule involves a specific formula based on RVUs and Geographic Practice Cost Indicators (GPCIs):

GPCIs, or Geographic Practice Cost Indicators, reflect the total costs of medical services based on the physician’s geographical location. For example, the cost of an X-ray in California will be different from that in Arkansas.

The final rule to the equation involves multiplying the answer by a Conversion Factor (CF). Under the proposed CY 2027 rule, there are separate conversion factors for qualifying APM participants ($33.17, a projected 1.19% decrease) and non-qualifying APM participants ($32.84, a projected 1.68% decrease). The answer determines the payment rate for a physician depending on the CPT code. The last equation looks like this:

Understanding this fee schedule calculation is crucial for accurate medical billing and revenue cycle tracking.

After all those variable factors and calculations, the final rule is that Medicare payment rates will consist of an 80% cost reimbursement and a 20% copay by the patient. Utilizing billing collections best practices helps ensure timely payments, while CMS uses pre-claim review initiatives and prior authorization to ensure physician compliance with Medicare regulations and rules.

Telehealth Services and Medicare Fee Schedule Changes

After the COVID-19 PHE (Public Health Emergency), millions of Medicare beneficiaries in the United States took advantage of increased patient access to remote services via telehealth providers. In November 2026, the CMS released its rules regarding the 2027 CMS Fee Schedule for remote medical care, such as digital evaluation and behavioral health services.

The final rule will eliminate billing reimbursement for telephone evaluation and management (E/M) services, eliminate mandatory direct supervision, and create three new codes for prolonged E/M services.

E/M Visit Complexity Add-On (HCPCS code G2211)

For CY 2027, CMS is proposing to transition HCPCS code G2211 to a modifier appended to the associated E/M base code, increasing payment by 16%. Additionally, a new modifier is proposed for practitioners in ACOs (such as Shared Savings Program ACOs or LEAD Model ACOs) providing longitudinal care, which would increase payment of the associated E/M visit by 32%.

Remote Monitoring Updates

For CY 2027, CMS proposes that Remote Therapy Monitoring (RTM) services be furnished only to established patients. Practitioners reporting RPM or RTM services must furnish a separately reportable initiating visit, and payment will only be allowed when services are delivered by clinical staff employed by the practice rather than contractors.

Practice Expense Revisions

CMS is engaged in a multi-year effort to phase out reliance on outdated specialty-specific practice expense per hour (PE/HR) data from 2007 or earlier. The proposed methodology replaces the existing final step with a PE stabilizer to mitigate short-term volatility and make PE RVU assignments more objective and transparent.

Quality Payment Program

Before the Quality Payment Program (QPP), Medicare reimbursement cost increases followed regulations within the Sustainable Growth Rate (SGR) law, which capped spending increases. However, the SGR would have caused considerable reductions in the fee schedule.

To prevent this, Congress passed an annual law protecting Medicare reimbursement rates and adjusting for inflation. Now, high-quality physicians and providers who are part of an Accountable Care Organization can earn a cost increase.

For CY 2027, CMS is proposing separate coding and payment for shared medical appointments to support chronic disease prevention and management. Additionally, smoking and tobacco use cessation services and screening, brief intervention, and referral to treatment (SBIRT) services are proposed to be included in the final year of the transition for upward work RVU adjustments for timed behavioral health codes.

Differences Between the Medicare and Medicaid Fee Schedule

Health equity is an important consideration for Medicare beneficiaries. Therefore, knowing the differences between the Medicare and Medicaid Fee Schedules is vital.

The CMS manages the Medicare Physician Fee Schedule, whereas the Medicaid Fee Schedule operates at a state level with minimal assistance from CMS. Thus, the Medicaid Fee Schedules vary from state to state across the country.

Furthermore, Medicaid Fee Schedules generally feature lower reimbursement rates. A Medicaid carrier usually gets lower reimbursement costs for a patient receiving a Medicaid service than a physician providing the same service to a Medicare beneficiary under the Medicare physician fee schedule.

Limiting Medicare Coverage

Under Public Law 119-21 (Working Families Tax Cut legislation), CMS is proposing rules to limit Medicare eligibility to four specific groups: U.S. citizens/nationals, lawfully admitted permanent residents, individuals granted Cuban and Haitian entrant status, and individuals lawfully residing under a Compact of Free Association.

Medicare Prescription Drug Inflation Rebate Program

CMS is proposing updated policies under the Medicare Prescription Drug Inflation Rebate Program established by the Inflation Reduction Act. Beginning January 1, 2027, covered entities billing under Part D must submit specific 340B Program claim data to the Medicare Part D Claims Data 340B Repository.

How to Stay Up-to-Date on the Medicare Physician Fee Schedule and Billing Automation

As a physician, staying up-to-date regarding the regulations and final rule changes for the MPFS and other programs, like the Medicare Shared Savings Program and Consolidated Appropriations Act, is essential. First, you can access the CMS CY 2027 PFS Proposed Rule Fact Sheet. The American College of Surgeons has another informative and useful page about the fee schedule, as do the American Medical Association and the American Academy of Neurology.

Another effective option is leveraging medical billing automation and professional payment services from Weave. Implementing automation in medical billing helps streamline your patient billing process, optimize collections, and ensure your practice remains compliant with ongoing MPFS and CMS updates.

Using the CMS Physician Fee Schedule Look-Up Tool

In addition, the CMS Physician Fee Schedule Look-Up Tool is another valuable resource care providers can use to remain current with final rule changes or modifications. Because CMS adjusts determining variables like the conversion factor annually, keeping track of these updates improves overall patient billing collections. You can also use the CMS website to learn more about additional fee schedules, such as the Ambulatory Surgical Center (ASC) schedule.

Contact Weave Today for Streamlined Billing and Payment Management Services

As you can see, keeping up with the Medicare Physician Fee Schedule and managing your billing collections can be challenging. However, you don’t have to spend hours struggling to calculate payment rates or manually managing patient billing. Let Weave’s automated payment solutions simplify your billing process.

We offer a comprehensive payment processing solution that equips your practice with modern billing automation tools to provide patients with a seamless payment experience and fast, accurate reimbursement management. To learn more about navigating the Medicare Fee Schedule and request a demo of our services, call our team at Weave at 833-572-2139.

Article updated August 25, 2026.