A Multi-Schedule Machine Learning Pipeline for Medicare Reimbursement Change Prediction and Operational Risk Stratification

FeePredict is a three-stage random forest machine learning framework to simul-taneously predict whether Medicare reimbursement rates for specific procedures will change, in which direction they will change, and by how much. FeePredict was ap-plied to the four major Medicare fee schedules: the Clinical Laboratory Fee Schedule (CLFS), the Physician Fee Schedule (PFS), the Ambulance Fee Schedule (AFS), and the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) fee schedule. Each of these fee schedules contains publicly available data from the Centers for Medicare & Medicaid Services (CMS) for the years 2024, 2025, and 2026, with the number of procedures represented in the data ranging from 3,264 to 2,952,842 observations.FeePredict utilizes lag-1 feature engineering and train-only preprocessing steps to ensure that there is no data leakage into the model. Chronological out-of-time valida-tion was performed on three of the four fee schedules to determine the generalizability of the model over time. FeePredict significantly outperformed the assumption that there would be no changes to Medicare reimbursement rates for procedures (p < 0.001), achieving concordance indices between 0.815 and 0.998, and reducing the mean abso-lute error for predicting changes to reimbursement rates by 29% to 85%. Permutation testing of the model with shuffled reimbursement rate labels indi-cates that there is no evidence of data leakage (AUC values: 0.467-0.515). The model achieved concordance indices of 0.854 and 0.972 for the CLFS and DMEPOS fee sched-ules, respectively, outside of its training period, but performed less well outside of its training period for the PFS, indicating that it generalizes less well to changes to the Medicare policy regime that existed after its training period. Overall, though, these re-sults indicate that it is possible to accurately predict whether Medicare reimbursement rates for medical procedures will change using only data from the historical versions of those fee schedules.