Percent of Medicare comparisons: A primer on using Medicare payment rates as benchmark

Comparing non-Medicare payment rates to estimated Medicare fee-for-service payment rates is used as a common benchmark when evaluating healthcare reimbursement levels. These Medicare payment rate benchmarks are used for activities such as unit price analysis, provider contract negotiations, and policy development. A key statistic calculated for such comparisons is the “percent of Medicare.” This paper discusses the following topics for when using percent of Medicare comparisons for analysis:

• Percent of Medicare definition
• Scope considerations
• Actual payment calculation considerations
• Medicare payment calculation considerations
• Additional considerations for calculating and presenting percent of Medicare