Guide · Updated Jul 6, 2026
What Percent of Medicare Means in a Commercial Contract
Most commercial payer contracts price physician services as a percentage of the Medicare Physician Fee Schedule amount rather than negotiating a dollar figure code by code — "BCBS pays 115% of Medicare" is a real, common contract term. Finding your actual multiplier is the first step to knowing what you should be collecting.
Why payers price this way
Medicare's PFS formula already produces an auditable, code-by-code amount for nearly every service. Rather than negotiate thousands of individual fees, commercial payers anchor to that published schedule and apply a single multiplier (or a small handful of multipliers by service category) across the whole fee schedule. The multiplier itself — not the underlying Medicare rate — is what payers actually negotiate with a practice.
Where the number actually lives
The multiplier is written into the reimbursement or fee-schedule exhibit of the signed payer contract, not on any remittance advice or portal summary — it has to be read out of the contract PDF (or requested from the payer if the practice never kept a copy). Look for language like "Medicare Physician Fee Schedule multiplied by X%" or a rate table with a header referencing "% of Medicare" or "% of CMS."
A vintage often comes attached
Contracts frequently peg the multiplier to a specific, frozen year's schedule ("105% of 2023 Medicare rates") rather than the current one, so a rate change from a new CMS release does not automatically reprice the contract until it is renegotiated or the reference year rolls forward per the contract's terms. Confirming which year a contract references is as important as confirming the percentage itself.
Checking your own multiplier
Once you have a multiplier and a reference year, checking whether a payer is actually paying it is arithmetic: take the Medicare non-facility amount for the code and reference year, multiply by the percentage, and compare it to the remittance. A code page's contracted-rate table shows several common multipliers at once; the calculator lets you enter your exact one and compare it against an actual paid amount.
Percent-of-Medicare calculator
Start from the Medicare amount for the code (from any code page on this site, matching the setting and year your contract references). At 115% of a $79.23 Medicare rate, the contracted allowed is $79.23 × 1.15 = $91.11. Or work backwards: a payer that paid $95.00 against that rate is paying at $95.00 ÷ $79.23 ≈ 119.9% of Medicare.
To have the Medicare amount looked up for you — by code, date of service, locality, and setting — use the expected-payment calculator.
Frequently asked
Is "% of Medicare" the same for every code in a contract?
Not always. Many contracts use one blanket multiplier across the fee schedule, but some carve out different percentages by service category (e.g., surgery vs. evaluation and management visits) — check the contract's fee exhibit for category-specific rates before assuming a single number applies everywhere.
What if I don't know my contract's percentage?
Compare a few recent remittances for common codes against the Medicare amount for the same code, locality, and date of service to back into the effective percentage, or request the fee-schedule exhibit from your provider relations contact — payers are generally required to make it available on request.
Does the percentage apply to the facility or non-facility rate?
That depends on the contract and where the service was performed — most contracts referencing "the Medicare rate" mean whichever setting (facility or non-facility) matches how the claim was billed, so use the matching Medicare amount for the comparison.
Related
Sources
Written from primary CMS sources — see how we source, compute, and verify everything on this site.