CMS Reimbursement

Learn more about the fundamentals of healthcare reimbursement and CMS as a trusted source for claim pricing.


Centers for Medicare & Medicaid Services Understanding CMS Reimbursements

The Centers for Medicare & Medicaid Services represents government-managed healthcare programs – Medicare is handled at the federal level, and Medicaid is handled by each state.

As the payer for more than 67 million Americans’ healthcare plans, the federal government has established a useful benchmark for tackling spiraling healthcare costs. Based on costs, not profits, Medicare is designed to cover the actual cost of care delivered, as opposed to basing cost on a top-down contracting model that applies discounts to hospital chargemasters, which are tied to the hospital’s profit margin. Medicare is a widely accepted and understood pricing source for medical care. Increasingly, self-funded organizations and health plans are reducing their financial risk by using CMS as a basis for their claim pricing and reimbursement strategies.

How Are CMS Reimbursements Calculated?

CMS publishes fee schedules that refer to the payment amount Medicare reimburses physicians and other healthcare providers for medical services they provide to a Medicare beneficiary. The Medicare Fee Physician Fee Schedule alone contains more than 10,000 individual amounts for physician services.

The amount of money Medicare or Medicaid will reimburse a provider depends upon a number of factors, starting with a base rate that is adjusted with the use of multiple data points like wage indexes, demographics, and geographic location. However, there are recognized minimum and maximum payment limits that apply across the board.

CMS’s Medicare reimbursements are typically less than the provider’s billed amount or the amount that a private insurance company might pay. Medicare’s reimbursement rate, on average, is roughly 80 percent of the total bill.

Providers have the option to accept Medicare patients. They also have the choice as to what they charge:

  • The set CMS reimbursement rate or,
  • A higher rate that follows hospitals’ ambiguous chargemasters

Integrating CMS Reimbursements for Accurate Healthcare Claim Pricing

By integrating established healthcare pricing from CMS into the claim pricing process, health plans and their members can rest easier knowing they will be charged a fair cost for care. Our Visium™ claim pricing platform is rooted in Medicare, which yields not only a more accurate price but also a payment amount that is backed by data that providers understand.

Access to CMS Pricing Transparency – Payer Compass’ Price Map

CMS cost data is the foundation for our Price Map, an online tool created with healthcare transparency top of mind. Featuring the nation’s most reliable source for medical pricing, payers can compare Medicare payment rates for facilities across the U.S. using the top procedural codes associated with inpatient and outpatient services. CMS Five-Star Quality Ratings are also included.

Bring Rational, Transparent Costs to Healthcare with Payer Compass

Payer Compass offers innovative solutions and next-gen technology with reliable data at their core. Incorporating CMS’s cost and quality figures means accurate, error-free claim pricing and defensible payments to providers.