What Does Medicare Pay
for Your Procedure?

A CPT (Current Procedural Terminology) code is a 5-digit number that identifies a specific medical service or procedure. These codes are used by doctors, hospitals, and insurers to describe what care was provided. They were developed by the American Medical Association and are the universal language of medical billing.

CPT codes appear on your Explanation of Benefits (EOB) from your insurer, your itemized hospital bill, or your Medicare Summary Notice. They are usually listed in a column labeled "Procedure Code" or "Service Code." If you don't see them, call your provider and ask for an itemized statement.

The Medicare rate is what the federal government pays physicians for a specific procedure in your geographic area. It's calculated using a formula: (Work RVUs + Practice Expense RVUs + Malpractice RVUs) × Geographic Adjustment × Conversion Factor. It's not what you'll necessarily pay, but it's a powerful benchmark — if your bill is 10x the Medicare rate, that's worth reviewing.

Medicare adjusts rates by locality to account for differences in the cost of running a medical practice. A primary care visit in Manhattan costs more to provide than the same visit in rural Mississippi. These geographic adjustments are applied at the ZIP code level using Medicare Locality designations.