Commercial reimbursement is an important part of a practice's contract review. Useful comparisons start with the services a practice actually provides, the payer and network, and the terms that determine payment.
For 2025, CMS set the Medicare Physician Fee Schedule conversion factor at approximately $32.35, down 2.83% from $33.29 in 2024. That change concerns the conversion factor; the payment for an individual service also depends on its relative value units, geographic adjustments, and other payment rules.1
Choose the right benchmark
Milliman estimated 2024 commercial reimbursement for professional services at 143% of Medicare fee-for-service rates. Its 190% estimate covers medical services overall, combining professional, inpatient, and outpatient services. Using the overall figure as a physician-service benchmark would mix different types of care.2
Those estimates use claims from 2021 and 2022 projected to 2024. They describe broad reimbursement patterns, rather than the rate a particular practice should expect for a particular code.2
A useful comparison should match:
- Service: billing code, code system, and relevant modifiers.
- Setting: professional or institutional billing and place of service.
- Market: geography, provider specialty, payer, and network.
- Payment basis: dollar amounts, percentages, and other negotiated rate types.
- Time: the publication month and applicable contract or fee-schedule year.
Payer transparency files provide published negotiated rates. A practice's own contracts and remittance records establish the terms that apply to its services and what it was actually paid.
Prepare a documented contract review
Start with frequently billed services and the contracts coming up for renewal. Compare the practice's current rates with relevant published rates, then identify the differences that merit a conversation with the payer.
Record the comparison's scope alongside the numbers: which codes, providers, networks, and publication dates were used. Keep professional and facility rates separate. A higher published number is useful only when the underlying service and payment terms are comparable.
OmniRate supports this work with payer, billing-code, taxonomy, and location filters. The payer coverage pages identify available snapshots and sources; the rate explorer provides search and export tools.
A historical negotiation example
A 2004 article in the American Academy of Family Physicians' Family Practice Management described a Virginia group's contract negotiation. The group used a target tied to the 2004 Medicare schedule and compared the health plan's payments with a competing plan. The reported agreement began at 128% of Medicare, with 3% annual increases over four years.3
The useful lesson is the documented comparison and explicit contract terms. A single historical agreement does not predict a current practice's revenue gain. Estimate the effect of any proposed contract using the practice's own service volume, payer mix, payment rules, and costs.