Fee Schedule

A fee schedule is a published list of payment amounts for specific medical services, expressed as a dollar amount per CPT/HCPCS code. Every payer maintains fee schedules — Medicare's MPFS (Medicare Physician Fee Schedule) is published annually by CMS and serves as the benchmark most commercial payers price against (typically expressed as a percentage of Medicare). Commercial payer fee schedules are negotiated bilaterally with each provider through participation contracts and are usually expressed as a percentage of Medicare or a custom rate per code. The most common cause of CO-45 contractual adjustments is the difference between what a provider charges (charge master rate) and the contracted allowed amount on the fee schedule. Stale fee schedules in the practice billing system are a major hidden source of revenue leakage: payers renegotiate rates mid-cycle more often than most practices realize, and a billing system pulling from last year's fee schedule will systematically miss underpayments where the new contracted rate is higher than what was billed. Best practice is to update fee schedules every quarter, run monthly variance reports comparing billed versus allowed by CPT, and flag anomalies that suggest stale schedules or payer adjudication errors. Underpayment recovery — chasing claims paid below the contracted fee schedule — is one of the highest-margin recovery opportunities in revenue cycle.