Methodology

This explains exactly how "above fair market" is calculated, what it does not cover yet, and where each number comes from.

Physician, hospital outpatient, and inpatient charges

These three settings are priced against the published 2026 Medicare fee schedules (Physician Fee Schedule, OPPS Addendum B, and FY2026 MS-DRG weights), adjusted for your facility's locality where applicable. Fair market is calculated as that Medicare rate multiplied by a sourced commercial-to-Medicare ratio:

• Inpatient (MS-DRG): 2.54×
• Hospital outpatient (OPPS): 2.79×
• Physician (PFS): 1.84×

These ratios come from the RAND Corporation's Hospital Price Transparency Study, Round 5.1 (2024), the most recent published edition of a peer-reviewed national survey of what commercial health plans actually pay compared to Medicare, for each of these three settings specifically. We did not choose or adjust these numbers ourselves.

Laboratory charges

Laboratory tests (billed under the Clinical Laboratory Fee Schedule, or CLFS) are priced against the published Medicare rate for each test, and shown on your results. But we do not apply a fair-market multiplier to lab charges, and lab charges are not included in the "above fair market" total.

The reason is specific, not a shortcut: RAND's study does not cover lab pricing, and no comparable published national ratio for lab exists yet. Applying one of the other three ratios to lab charges would mean guessing, and Medicare's own CLFS rate is calculated differently from the other three schedules in a way that makes borrowing a ratio from them unreliable in either direction.

What we can say, and disclose on your results when a bill includes lab charges: lab charges typically run well above published Medicare rates, based on documented industry patterns — not calculated from your specific bill or hospital. We are actively building a dedicated lab-specific benchmark, sourced the same way as the three ratios above, and will apply it once it exists.

What counts as "above fair market"

Two different things can make a line item count toward your total. A charge can be flagged as a likely billing error — a duplicate, a service billed but not described anywhere on the bill, and similar concrete issues — based only on what your document itself shows. Separately, a charge can simply be priced above the fair-market figure described above. Both are shown to you, and both are described honestly as questions worth raising, not certainties.

CutMediBill is not a law firm and does not provide legal advice. A provider may lawfully charge more than these published rates.