Your fee schedule: setting charges you will not regret

How do I set my practice fee schedule?

Setting a fee schedule starts by separating three numbers that get collapsed into one: your charge, the amount a contract actually allows, and what you finally collect. Your charge is what you put on the claim. The allowed amount is the most a contracted payer will pay for that code. Collections are what survives the contractual write-off, the patient's share, and any denials. Almost every fee-schedule mistake comes from treating these three as the same figure.

The useful frame is that you control only one of them directly. Your contracts and Medicare set the allowed amounts; the market and your effort determine collections; but the charge is yours to choose. So the whole task reduces to setting charges well, and setting them well means anchoring to a defensible reference, pricing above every contract's allowed amount, keeping the schedule consistent and loadable into your system, and reviewing it on a fixed annual cadence. The sections below build the schedule in that order.

Three different numbers: your charge, the allowed amount, and what you collect

Your charge is the sticker price you submit; the allowed amount is what your contract with a payer says that code is worth; and collections are what lands in the account after adjustments, patient balances, and denials. The gap between the charge and the allowed amount is the contractual adjustment you write off on every in-network claim, and it is normal, not a loss. Confusing the charge with expected revenue is the error that leads solos to price too low.

The reference that ties these together is the Medicare Physician Fee Schedule, which sets what Medicare pays for clinician services and is updated every year through rulemaking that adjusts the relative value units, the conversion factor, and policy 1Ref 1Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule.That the Medicare Physician Fee Schedule sets payment for clinician services from relative value units and a conversion factor, is updated annually through rulemaking, and is the reference most commercial contracts are written as a percentage of. As of July 2026.. Even if Medicare is a small part of your payer mix, its fee schedule is the common yardstick the whole industry is measured against, because most commercial contracts are written as a percentage of the Medicare rate. That makes Medicare the natural spine to build your own charges around.

Anchor to Medicare: RVUs, the conversion factor, and the lookup

Medicare builds each code's payment from relative value units, which weight the work, the practice expense, and the malpractice cost of a service, adjusted for your geographic area and multiplied by a national conversion factor set annually 1Ref 1Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule.That the Medicare Physician Fee Schedule sets payment for clinician services from relative value units and a conversion factor, is updated annually through rulemaking, and is the reference most commercial contracts are written as a percentage of. As of July 2026.. You do not have to compute any of that by hand. CMS publishes a Physician Fee Schedule search tool where you can enter a CPT or HCPCS code and read the national and locality-specific payment amount, the RVUs, and the payment indicators directly 2Ref 2Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule Search.That CMS publishes a public look-up tool where any clinician can find the national and locality payment amount, the RVUs, and the facility and non-facility rates for a CPT or HCPCS code, so the fee schedule is built on current published amounts rather than a vendor database..

The practical move when building a schedule is to pull the Medicare allowed amount for every code you bill, using your own locality, and treat that column as the reference. Because commercial contracts are so often expressed as a percentage of Medicare, having the Medicare number in front of you also lets you read a contract offer in plain terms: a rate quoted as a percentage of Medicare is only meaningful once you know the Medicare figure it multiplies. The lookup is free and current, so it is the honest starting point rather than a vendor's benchmark database.

The rule that saves money: never charge below an allowed amount

Here is the single rule that names the page: never set a charge below what any payer might allow. Under most contracts a payer pays the lesser of your billed charge or the plan's allowed amount, so a charge set below a contract's allowed amount does not save anyone money — it simply caps your own payment at the lower number you wrote.

Underpricing a charge is the quietest way to leave earned revenue on the table, and it compounds across every claim for that code.

The common way to avoid it is to set charges as a flat multiple of the Medicare rate across the whole schedule, chosen so the charge sits comfortably above the highest amount any of your contracts allows. The exact multiple matters far less than that it clears every payer's allowed amount, because the charge above the allowed amount is written off anyway and costs you nothing, while a charge below it is a permanent discount you gave by accident. A consistent multiple also makes the schedule defensible: uniform charges across codes read as a policy rather than as numbers picked one at a time.

Facility versus non-facility, and place of service

Many codes carry two Medicare rates, a facility rate and a non-facility rate, and the place-of-service code decides which one applies 3Ref 3Centers for Medicare & Medicaid Services (2026).Place of Service Code Set.That the place-of-service code, including 11 for the office, is defined by CMS and determines whether the facility or non-facility rate applies, so a code carries two rates and the fee schedule is built around the setting the practice works in.. In your own office you bill the non-facility setting, place of service 11, and the non-facility rate is typically the higher of the two because it folds in the overhead the practice itself carries. Seeing only one of the two rates, or billing the wrong place of service, is how a code gets underpaid without any denial to flag it.

When you pull each code from the fee-schedule lookup, note both the facility and non-facility amounts and build your schedule around the setting you actually work in 2Ref 2Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule Search.That CMS publishes a public look-up tool where any clinician can find the national and locality payment amount, the RVUs, and the facility and non-facility rates for a CPT or HCPCS code, so the fee schedule is built on current published amounts rather than a vendor database.. For a solo delivering care in an office or by telehealth, that is almost always the non-facility rate, but the place-of-service code still has to match where care happened on each claim, since it is the field that tells the payer which rate to apply. Aligning your fee schedule, your place of service, and where care is genuinely delivered keeps the higher rate from silently becoming the lower one.

Medicaid floors and the self-pay rate you own

Two parts of the schedule are not really yours to set. If you enroll with a state Medicaid program, the state publishes a fixed fee schedule you accept rather than negotiate, and those rates vary widely from state to state, so there is no national Medicaid number to plan around.

The move is to find your own state's published schedule: Florida's Agency for Health Care Administration 4Ref 4Florida Agency for Health Care Administration (2026).Florida Agency for Health Care Administration.That Florida's Medicaid agency publishes the state's provider enrollment, billing manuals, and fee schedules, cited as one named example that state Medicaid rates are state-published and fixed, never a national rate., California's Department of Health Care Services 5Ref 5California Department of Health Care Services (2026).California Department of Health Care Services.That California's Medicaid agency publishes the state's provider enrollment, billing manuals, and fee schedules, cited as one named example that state Medicaid rates are state-published and vary by state., New York's eMedNY 6Ref 6New York State Department of Health (2026).eMedNY.That New York's Medicaid program publishes the state's provider enrollment, billing manuals, and fee schedules through eMedNY, cited as one named example that state Medicaid rates are state-published and vary by state., and Texas's Medicaid and Healthcare Partnership 7Ref 7Texas Health and Human Services Commission (2026).Texas Medicaid & Healthcare Partnership (TMHP).That Texas's Medicaid program publishes the state's provider enrollment, billing manuals, and fee schedules through TMHP, cited as one named example that state Medicaid rates are state-published and vary by state. each run their state's enrollment, billing manuals, and fee schedules, and every state has an equivalent you locate the same way. Your state's authority controls; another state's rate tells you nothing about yours.

The rate you do own completely is the self-pay or out-of-network fee. This is the session fee a cash-pay or out-of-network practice quotes directly, and because a patient is handed the number rather than a payer, it has to be one you can state plainly and apply the same way every time. Setting oon fees deliberately, and keeping them consistent with the rest of the schedule rather than wildly below what you bill insurers, avoids both an awkward conversation and a pricing pattern that undercuts your own contracted rates.

Load it into your system and request each payer's schedule

A fee schedule earns its keep only once it lives in the software that posts your claims and payments. Enter your charges once, and then load each payer's contracted allowed amounts alongside them so the system can post the contractual adjustment automatically and, more importantly, flag a payment that came in below the contracted rate.

Loading allowables is what turns a static price list into an underpayment detector, because the system can only tell you a payer shorted you if it knows what that payer agreed to pay.

Getting those allowed amounts is a request you are entitled to make. The fee-schedule request asks each contracted payer for the current fee schedule for the codes you bill, and it is a routine part of managing a contract rather than a favor. For Medicare, the amounts come straight from the public lookup 2Ref 2Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule Search.That CMS publishes a public look-up tool where any clinician can find the national and locality payment amount, the RVUs, and the facility and non-facility rates for a CPT or HCPCS code, so the fee schedule is built on current published amounts rather than a vendor database.; for commercial payers, they come from the contract or the payer's provider portal. With both your charges and every payer's allowables loaded, each remittance can be checked against what was owed instead of accepted on faith.

Review it every year

A fee schedule is a living document, and the calendar decides when it drifts out of date. Medicare updates the conversion factor and the relative value units annually through rulemaking, so the reference amounts your charges are built on move every year 1Ref 1Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule.That the Medicare Physician Fee Schedule sets payment for clinician services from relative value units and a conversion factor, is updated annually through rulemaking, and is the reference most commercial contracts are written as a percentage of. As of July 2026.. CPT itself changes on the same cadence, adding, revising, and deleting codes each year under the AMA's maintenance of the code set, so a schedule left untouched will eventually bill deleted codes and miss new ones 8Ref 8American Medical Association (2026).CPT® (Current Procedural Terminology).That CPT is maintained by the AMA and updated annually, adding, revising, and deleting codes, so a fee schedule must be reviewed yearly to add new codes and retire deleted ones..

The annual fee review is the fixed task that keeps the schedule honest: re-pull the current Medicare amounts, add the year's new codes and retire the deleted ones, confirm your charges still sit above every payer's allowed amount, and reload the updated allowables into your system. Building the review into a set month each year, rather than reacting when a denial reveals a retired code, is the difference between a fee schedule that stays accurate and one that quietly decays. It is an hour or two of work that protects the pricing decisions behind every claim you send.

Sanity-check the economics: what your time must earn

A fee schedule is only as good as the income it produces, so it is worth checking against two realities the charge column hides. The first is that a charge is a ceiling, not revenue: contractual adjustments and denials both pull collections below it, and denials are common enough to matter, with KFF's analysis of federal transparency data putting average in-network denial rates in ACA marketplace plans in the high teens 10Ref 10Kaiser Family Foundation (2025).Claims Denials and Appeals in ACA Marketplace Plans.That in-network claim denial rates in ACA marketplace plans average in the high teens per KFF's analysis of federal transparency data, the basis for treating a charge as a ceiling that denials pull collections below.. A schedule priced correctly still under-delivers if denials go unworked.

The second reality is what your own time needs to earn. Public wage data is a reasonable benchmark for that: the Bureau of Labor Statistics publishes wage distributions by occupation and state, such as its figures for clinical and counseling psychologists, which give a grounded reference point for the draw your practice has to support 9Ref 9U.S. Bureau of Labor Statistics (2025).Occupational Employment and Wages: Clinical and Counseling Psychologists.That the Bureau of Labor Statistics publishes wage distributions by occupation and state, such as for clinical and counseling psychologists, giving a grounded benchmark for the draw a practice's fee schedule and volume need to support.. Pairing the fee schedule with a realistic view of the visit volume behind it, and for prescribers the solo prescriber's schedule of intakes and follow-ups that fills the week, turns a price list into a plan for whether the practice actually pays for itself. The schedule sets the ceiling; the mix and the collection effort decide how much of it you keep.