What Is the Medicare Physician Fee Schedule (MPFS) & Allowable Rate?
The Medicare Physician Fee Schedule (MPFS)—also widely referred to across revenue cycle departments as the CMS fee schedule, medical physician fee schedule, or CMS provider fee schedule—is the official federal pricing list maintained by the Centers for Medicare & Medicaid Services (CMS) to reimburse Part B clinicians for more than 10,000 CPT and HCPCS Level II procedure codes. First enacted in 1992 to replace historical charge-based billing, the Medicare fee schedule establishes standardized, resource-based payment amounts for physicians, nurse practitioners (NPs), physician assistants (PAs), physical therapists, podiatrists, and independent diagnostic testing facilities.
When medical billers perform a physician fee schedule lookup, the dollar figure they are checking is the Medicare allowable rate (or Medicare-approved amount). Under the physician fee schedule Medicare updates every January 1, your practice’s billed charge on Box 24F of the CMS-1500 form is only your retail list price. Medicare adjudicates the claim down to the official Medicare allowable rate, writes off any contractual excess for Participating clinicians (CARC CO-45), and splits the approved amount between Medicare’s 80% remittance and the beneficiary’s 20% coinsurance.
Beyond traditional Medicare Part B, running a fast CMS fee schedule lookup is essential for private commercial contracting. Nearly 75% of commercial PPO, HMO, Medicare Advantage, and Workers’ Compensation fee schedules benchmark their reimbursement directly as a percentage of the current physicians fee schedule (for example, “125% of current-year CMS locality rates”).
How CMS Rates for CPT Codes Work: The RBRVS & RVU Fee Schedule Formula
Unlike the clunky multi-screen government CMS physician fee schedule lookup tool, understanding how Medicare rates CPT codes becomes effortless once you see the underlying math. Every entry in the CMS National Physician Fee Schedule Relative Value File (Addendum B) is priced using the Resource-Based Relative Value Scale (RBRVS)—commonly called an RVU fee schedule.
Every Medicare CPT fee schedule allowable combines three procedure-specific Relative Value Units (RVUs), three local Geographic Practice Cost Indices (GPCIs), and one national dollar Conversion Factor (CF).
1. Physician Work RVU (~51%)
Reflects the clinician’s time, technical skill, physical effort, mental judgment, and clinical stress required to perform the CPT service.
2. Practice Expense (PE) RVU (~45%)
Covers clinical nursing/MA payroll, medical supplies, office rent, EHR software, and diagnostic equipment. Has separate Non-Facility and Facility weights.
3. Malpractice (MP) RVU (~4%)
Accounts for professional liability insurance premiums weighted by specialty risk (e.g., neurosurgery and obstetrics carry much higher MP RVUs than office medicine).
Worked Example: Determining CMS Rates for CPT Codes (CPT 99214 in Manhattan vs. National Average)
Suppose you use our physician fee schedule look up tool above to price established office visit 99214 (Work RVU 1.92, Non-Facility PE RVU 1.88, MP RVU 0.13) under the CY 2026 standard conversion factor ($33.4009):
- National Unadjusted Baseline (GPCIs = 1.000): Total RVUs =
1.92 + 1.88 + 0.13 = 3.93 RVUs×$33.4009= $131.27 Medicare Allowable. - Manhattan, NY Locality (1320201 — Work 1.064, PE 1.182, MP 1.442): Adjusted RVUs =
(1.92 × 1.064) + (1.88 × 1.182) + (0.13 × 1.442) = 4.4525 RVUs×$33.4009= $148.72 Medicare Allowable (+13.3% locality adjustment).
Non-Facility (Office POS 11) vs. Facility (Hospital POS 21/22/24) Rates
One of the costliest errors in revenue cycle management is pulling the wrong Place of Service (POS) column during a Medicare physician fee schedule lookup. CMS publishes two distinct allowable rates for most ambulatory procedures based on Box 24B of the CMS-1500 claim:
Applies when the procedure is performed in a freestanding physician office (POS 11) or eligible in-home telehealth (POS 10). Because the practice pays for its own medical supplies, nursing staff, lasers, ultrasound machines, and rent, the Non-Facility PE RVU is substantially higher. For example, tangential skin biopsy 11102 pays more than 2.5× higher in an office than in a hospital clinic.
Applies in Inpatient Hospitals (POS 21), On-Campus Outpatient Hospital Clinics (POS 22), Emergency Departments (POS 23), Ambulatory Surgical Centers (POS 24), and Skilled Nursing Facilities (POS 31). Because the facility bills its own overhead separately, the physician’s Facility PE RVU is reduced to prevent duplicate overhead payment.
Participating vs. Non-Participating vs. Limiting Charge Math
Every clinician enrolled in Medicare Part B falls under one of two participation elections (unless formally Opted-Out via private contract). Our Medicare physician fee schedule lookup tool computes all three statutory payment tiers automatically on every code card:
| Provider Status & Claim Type | Fee Schedule Formula | Example ($100.00 Par Base) | Who Receives Medicare’s Check? |
|---|---|---|---|
| Participating (Par) — Mandatory Assignment | 100% of MPFS Allowable | $100.00 ($80 CMS / $20 Pt) | Paid directly to Provider via EFT/ERA |
| Non-Participating — Assigned Claim | 95% of Par Allowable | $95.00 ($76 CMS / $19 Pt) | Paid directly to Provider |
| Non-Participating — Unassigned (Limiting Charge) | 115% of Non-Par (= 109.25% of Par) | $109.25 Max Patient Bill | Provider collects up to $109.25 from patient; CMS reimburses patient $76.00 (80% of $95) |
CMS Physician Fee Schedule 2026 vs. 2025: Proposed Rule to Final Rule Updates
Every summer in July, CMS releases the annual Medicare physician fee schedule proposed rule (also searched as the physician fee schedule proposed rule), opening a 60-day public comment window before publishing the binding Final Rule in early November. Tracking shifts from the PFS proposed rule 2025 cycle into the CMS 2026 proposed rule and Final Rule is critical for medical groups forecasting revenue and auditing aged claims.
Following a difficult CMS physician fee schedule 2025 year—where the conversion factor dropped 2.83% to $32.3465—the CMS proposed rule 2026 and subsequent CMS physician fee schedule 2026 Final Rule introduced major structural reforms to Part B reimbursement:
| Policy & Payment Benchmark | CMS Physician Fee Schedule 2025 | Physician Fee Schedule 2026 (Final) |
|---|---|---|
| Standard Conversion Factor (Non-QP) | $32.3465 | $33.4009 (+3.26%) |
| Qualifying APM Participant (QP) CF | $32.3465 (Single CF) | $33.5675 (+3.77% Dual MACRA Track) |
| Work RVU Efficiency Adjustment | None | -2.5% Work RVU cut on non-time-based procedures; E/M & behavioral health exempt |
| G2211 Longitudinal Care Add-On | Allowed with O/O E/M + preventive Mod 25 exceptions | Expanded & maintained (~$16.37 national allowable) alongside outpatient E/M visits |
Medicare prices claims strictly by the Date of Service (DOS) in Box 24A—never the date you submit the claim. If your A/R follow-up team is appealing a claim with a November 2025 DOS, switch our Conversion Factor dropdown above to CY 2025 ($32.3465) and verify timely filing deadlines in our Timely Filing Calculator.
Professional Fee Schedule vs. Medicare Hospital Fee Schedule (OPPS & IPPS)
Billers transitioning between physician practices and health systems frequently ask how a professional fee schedule compares to a Medicare hospital fee schedule. When a patient undergoes an outpatient procedure in a hospital—such as a snare colonoscopy (45385) or Level 4 Emergency Department visit (99284)—Medicare actually processes two separate claims under two completely different fee schedules:
- Professional Fee Schedule (CMS-1500 / 837P — MPFS): Covers the physician or non-physician practitioner’s cognitive and surgical work. Reimbursed via the Medicare Physician Fee Schedule at the Facility RVU rate. Non-physician practitioners (NPs and PAs) billing directly under their own NPI receive 85% of the MPFS physician allowable unless strict “incident-to” office criteria are met.
- Medicare Hospital Fee Schedule (UB-04 / 837I — OPPS & IPPS): Covers the hospital’s nursing staff, operating room time, recovery suite, and technical equipment. Outpatient hospital claims are paid under the Outpatient Prospective Payment System (OPPS) using Ambulatory Payment Classifications (APCs), while inpatient admissions are paid under the Inpatient Prospective Payment System (IPPS) using MS-DRG weights.
- Scrubbing Claims Before Submission: Before billing multiple procedures on either claim type, always verify unit limits in our MUE Lookup Tool, check Column 1/Column 2 bundling pairs in our NCCI Edits Lookup Tool, and confirm postoperative windows in our Global Surgery Calculator.
Frequently Asked Questions: Medicare Physician Fee Schedule (FAQ)
Hassan Nawaz is a medical billing and coding specialist with 5+ years of revenue cycle experience, building free, HIPAA-safe fee schedule calculators, CPT/NCCI claim scrubbers, and payer IVR tools for healthcare billing teams nationwide.
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