How workers' comp fee schedules work

Each state (or jurisdiction, in the case of federal programs like OWCP) publishes its own fee schedule, or set of fee schedules, that caps what providers can be paid for a given service. A fee schedule typically assigns a maximum allowed amount to a billing code, such as a CPT or HCPCS code, though the exact pricing logic varies widely by state and by service category.

Instead of a single flat number, most fee schedules are built from a formula: a relative value for the service, adjusted for geography, multiplied by a conversion factor, and sometimes further adjusted by place of service, provider type, or other modifiers. That means the "fee schedule amount" for a given code is rarely a static number. It has to be calculated at the time of billing, using the specific combination of code, modifier, place of service, and jurisdiction on that line.

What happens when a state doesn't have a fee schedule?

Not every state publishes a fee schedule for every service category, and hospital (facility) billing in particular is often left uncovered. When no fee schedule exists for a service, states and payers typically fall back on one of a few approaches:

  • Pay billed charges, reimbursing the full amount the provider billed
  • Disallow the charge entirely if it isn't covered or documented
  • Pay a percentage of the billed charge, a common approach for facility bills
  • Use UCR (Usual, Customary, and Reasonable) rates, benchmarked from independent charge or reimbursement databases

Which option applies depends on the state, the service category, and sometimes the specific payer's contract or policy. This is one of the most common sources of confusion and dispute in workers' comp bill review, because "no fee schedule" doesn't mean "no rules," it means the applicable rule has to be identified separately.

Professional vs. facility fee schedules

Professional billing (physicians, therapists, chiropractors, and similar providers submitting on a CMS-1500 form) and facility billing (hospitals, surgery centers, and similar providers submitting on a UB-04 form) are priced under completely different rules, even within the same state.

Professional fee schedules are frequently built on relative value units (RVUs) and a conversion factor, closely mirroring the Medicare Physician Fee Schedule. Facility fee schedules are far less standardized: some states publish explicit facility fee schedules, others rely on cost-to-charge ratios, ambulatory surgery center (ASC) groupers, or a percentage of the Medicare OPPS or IPPS methodology. It's common for a state to have a well-defined professional fee schedule but little to no explicit guidance for facility pricing, which pushes facility bills toward cost-to-charge ratios or negotiated rates instead.

Medicare-based fee schedules

Many state workers' comp fee schedules are built on top of Medicare's methodology, whether that's the Medicare Physician Fee Schedule (RVUs and a conversion factor), OPPS (Ambulatory Payment Classifications) for hospital outpatient services, or IPPS (Diagnosis-Related Groups) for hospital inpatient stays. States that follow this approach usually apply a markup or adjustment factor on top of the Medicare base numbers, and they adopt updated Medicare data on their own schedule and effective dates, which are not always aligned with Medicare's own release calendar.

This creates a practical challenge: correctly pricing a bill requires knowing not just which Medicare methodology a state follows, but which version of that methodology was in effect on the date of service, since Medicare data changes on varying cycles (physician and DME data updates quarterly, IPPS annually on October 1, OPPS and ASC quarterly, and so on).

How BillSentry applies fee schedules

BillSentry automatically identifies the applicable workers' compensation reimbursement methodology for each bill line, based on the state, date of service, billing code, place of service, and provider type, and calculates the allowed amount using the correct fee schedule, RVU tables, conversion factor, or facility pricing model for that line.

Every result is documented as a RuleTrace™: the exact rule, the calculation steps, and the regulatory citation behind the number, so the reimbursement decision is fully explainable rather than a black-box output.