Medicare Fee Schedule: What Does it Mean?

Medicare fee schedules are Medicare's attempt to control costs associated with Medicare health care. These schedules are produced by the Centers for Medicare and Medicaid Services. These fee schedules are part of the Medicare Sustainable Growth Rate (SGR) that was put into place in 1997 as part of the Balanced Budget Act of 1997. SGR basically says that if fees exceed the expected expenditure amount they will be reduced the next year using a conversion factor formula. Alternately if the fees were on average below the expected amount they will be raised to reward the doctor or provider. Not surprisingly the American Medical Association and other Medical lobbies want SGR reformed. It's currently been delayed many times for physicians and is to be implemented January 1, 2012.

Fee schedules are valuable for Medicare members because they list the Medicare approved amounts for almost everything and every physician. Medicare patients are often required to pay 20% of services so it's nice to have access to the information contained within the fee-schedules. All this information is sort of hidden away in the Centers for Medicare and Medicaid Services Website. Here are the links to all the Fee schedules. Some of the schedules on the site do not appear to be the latest update so look at the dates when you are checking the schedules.

Auntie Lou says, "Why is it so hard to figure out how much something is going to cost?"

Each fee schedule is included in a large zip folder. You will need to download this folder onto your computer and extract the files using an extraction tool provided by your browser (It should automatically pop up, you will see the "extract files" button). Within each fee folder there is an Excel sheet (open with Microsoft Excel program- again should pop up on its own when you double click it). There is also an index file and a fact sheet that can be opened with Adobe Acrobat Reader (free software probably already installed on your computer). A word of warning, these files are pretty lengthy and detailed and they are not easy to read. However, if you really want to know what that ambulance ride is going to cost you these are the documents with the numbers! Here you will find fee schedules for Plan B drug costs, physicians, ambulance services, clinical laboratory services, durable medical equipment and other supplies.

There is also an excellent glossary tool available at the Centers for Medicare and Medicaid Services website. For the sophisticated health care user there is an advanced database search tool. However, I never managed to get it to work.