Services and equipment provided to Medicare beneficiaries by healthcare providers are reimbursed by Medicare. The Medicare reimbursement rate, also referred to as the Medicare Physician Fee Schedule (MPFS), is the amount that Medicare pays to physicians and other healthcare professionals for services rendered to Medicare patients.

What is the Medicare reimbursement rate?

Typically, the rate that Medicare reimburses healthcare providers is less than the amount billed and less than the amount private insurers usually pay.

On average, the reimbursement rate is about 80% of the total bill, but not all types of healthcare providers get the same rate. Clinical social workers usually receive a little less, at an average of 75%, while clinical nurse specialists average a reimbursement rate of around 85%.

There is a coded number system Medicare uses to identify healthcare items and services for reimbursement, which is part of the Healthcare Common Procedure Coding System, or HCPCS. To see the reimbursement rates for specific equipment or services, you need the most recent HCPCS code for the service or item and the searchable MPFS. HCPCS codes specific to your visit should also be on the bill from the healthcare provider.

How does the Medicare reimbursement rate affect beneficiaries?

To put it simply, the Medicare reimbursement rate has almost nothing to do with the people who actually use Medicare. Reimbursement rates are, however, of great interest to Medicare-approved healthcare providers.

Even though you aren't required to understand Medicare's reimbursement rates for covered services, it is a good idea for you to review the HCPCS codes on your bill after receiving care or equipment. This will give you a better understanding of the charges and allocations on the bill. It also helps keep you aware of the services Medicare pays for. And finally, understanding the codes makes it easier to identify Medicare fraud, in the unlikely event it occurs.

If you have a Medicare Advantage plan, it is important to understand that traditional Medicare does not get charged. You should still see the same types of code on any bills, but since Advantage plans are sold by private insurers, the way they are charged and the amount they are charged differ. The best way to learn how charges work for your specific plan is to contact your provider.

Whether you have Original Medicare or a Medicare Advantage plan, if you notice a discrepancy between the charges on your bill and the care or services you received, contact your plan as soon as possible.

And if you're interested in learning more about the extra benefits you can get with a Medicare plan, enter your zip code in our Find a Plan tool to see which plans are available in your area.