Health Care Reimbursement

Resources that explain the various aspects of health care reimbursement and help researchers find sources of information on payment rates

Introduction

The first chart below summarizes the payment method for the various types of payers, and the second chart provides links to spreadsheets, documents, and web pages where actual Medicare payment rates can be found.

NOTE:

  • Actual payment methodologies may contain exceptions, special calculations, and adjustments for various factors (geography, local wage rates, hospital type, etc.).
  • Not all services, supplies, and drugs are covered by all payers.  Some (e.g., Viagra) may not be covered by any payers, or possibly just by a few expensive commercial insurance plans.

Payment Methodologies

Facility Payment Summary by Type of Payer

 
Medicare

Medicare Advantage

(Managed Care)

Medicaid Commercial Insurance
Inpatient
Prospective Payment System (PPS) with MS-DRGs.  Lump-sum payment for entire hospital stay. - Private physicians bill separately
Monthly Lump-Sum Payment for all patient care
Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab.
Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.
Outpatient Surgery or Procedure - in Hospital OP Dept.
Ambulatory Procedure Codes (APCs) via Outpatient Prospective Payment System (OPPS) - Physician Bills Separately.  Each APC averages a number of individual procedures into a single number (Compare to Amb Surg Ctr Payment, which has a longer list of individual procedures, each with a separate payment amount.)
Monthly Lump-Sum Payment for all patient care
Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab. Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.
Outpatient Surgery or Procedure - in Ambulatory Surgery Center (ASC)
Ambulatory Surgical Center Fee Schedule - HCPCS Codes
Monthly Lump-Sum Payment for all patient care
Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab. Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.
Outpatient Surgery or Procedure - in Physician's Office
Physician Fee Schedule Monthly Lump-Sum Payment for all patient care Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab. Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.
Prescription Drugs
Medicare Part D Drug Plan or Out-of-Pocket.  Some drugs are covered by Medicare Part B (physician services)--especially things like vaccine and other injections.
Monthly Lump-Sum Payment for all patient care Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab. Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.
Laboratory Services
Fee Schedule Monthly Lump-Sum Payment for all patient care Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab. Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.
Durable Medical Equipment (DME)
DME Fee Schedule - Some included in OPPS or ASC payments
Monthly Lump-Sum Payment for all patient care Fee-for-Service & Managed Care - Depends on Each State's Program Options.  More info on the Center for Medicare & Medicaid Services (CMS) website under the Medicaid tab. Fee-for Service, Managed Care, Preferred Provider Organizations, etc. Not publicly available.

 

  Step 1 Step 2 Step 3

How to Find Medicare Facility Payment Info by Service Type

Medicare Inpatient (Acute Care)
National Standard Payment Rate Per Patient Stay.  This is one number to which diagnosis-specific weights are applied.  The number includes labor, non-labor, and capital cost components.
Multiply Step 1 by DRG-Specific Weight for Target Diagnosis Group to determine average national payment for an inpatient in that group.
 
Medicare Outpatient Surgery or Procedure - in Hospital OP Dept.
Find APC code into which target procedure falls. May have to Google this.  Crosswalk tables available for purchase online that translate HCPCS codes (individual procedure codes) into APC codes (similar procedures grouped into a single payment group).
Find payment amount for procedure in OPPS Payment Chart.
 
Medicare Outpatient Surgery or Procedure - in Ambulatory Surgery Center (ASC)
Find HCPCS code for target procedure using Google, or go straight to step 2 to find procedure in ASC fee schedule.
Find payment amount for procedure in ASC fee schedule.
 
Medicare Outpatient Surgery or Procedure - in Physician's Office
Use HCPCS codes, based on the AMA's CPT coding system.  Find target codes(s) on this downloadable spreadsheet.
Consult the Medicare Physician Fee Schedule Look-Up Tool on the Medicare website.
 
Medicare Prescription Drugs
CMS conducts weekly nationall survey of prices paid for drugs by pharamcies (not consumer prices.  Visit this page for downloadable files.
CMS conducted periodic national survey of prices paid by consumers through 2013.  Find the archived files here under "Part I."
For drugs/injections paid under Medicare Part B (physician, diagnostic, other services), click here for fee schedule.
Medicare Laboratory Services
Medicare maintains a fee schedule accessible from this webpage.
   
Medicare Durable Medical Equipment (DME), Supplies, Non-Physician Services
Consult the Medicare HCPCS "Level II" Price List.
   

 

How to Determine Physician Payment for Procedure

  Step 1 Step 2
Summary of Step Determine which HCPCS billing code is associated with the procedure or visit Use HCPCS code(s) to search Medicare physician payment lookup tool for payment amount.
Where to Get Info
Medicare website (CMS.gov)--Download Excel spreadsheet from here.  The spreadsheet is a list of HCPCS codes and associated procedure names.
CMS.gov physician fee lookup tool
Tips on How to Use Info HCPCS names may not be what you expect.  To find relevant procedures, either sort the list alphabetically by the procedure column or use the Excel search feature to find keywords (e.g., "valve" or "cholecystectomy") Select "Global" fee for inpatient procedures and "Professional Component" for outpatient procedures.