[Code of Federal Regulations]

[Title 42, Volume 2]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR405.507]



[Page 117]

 

                         TITLE 42--PUBLIC HEALTH

 

                    CHAPTER IV--CENTERS FOR MEDICARE

                          & MEDICAID SERVICES,

                        DEPARTMENT OF HEALTH AND

                             HUMAN SERVICES

 

PART 405_FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED--Table of 

Contents

 

          Subpart E_Criteria for Determining Reasonable Charges

 

Sec. 405.507  Illustrations of the application of the criteria for 

determining reasonable charges.



    The following examples illustrate how the general criteria on 

customary charges and prevailing charges might be applied in determining 

reasonable charges under the supplementary medical insurance program. 

Basically, these examples demonstrate that, except where the actual 

charge is less, reasonable charges will reflect current customary 

charges of the particular physician or other person within the ranges of 

the current prevailing charges in the locality for that type and level 

of service:



    The prevailing charge for a specific medical procedure ranges from 

$80 to $100 in a certain locality.

    Doctor A's bill is for $75 although he customarily charges $80 for 

the procedure.

    Doctor B's bill is his customary charge of $85

    Doctor C's bill is his customary charge of $125

    Doctor D's bill is for $100, although he customarily charges $80, 

and there are no special circumstances in the case.

    The reasonable charge for Doctor A would be limited to $75 since 

under the law the reasonable charge cannot exceed the actual charge, 

even if it is lower than his customary charge and below the prevailing 

charges for the locality.

    The reasonable charge for Doctor B would be $85, because it is his 

customary charge and it falls within the range of prevailing charges for 

that locality.

    The reasonable charge for Doctor C could not be more than $100, the 

top of the range of prevailing charges.

    The reasonable charge for Doctor D would be $80, because that is his 

customary charge. Even though his actual charge of $100 falls within the 

range of prevailing charges, the reasonable charge cannot exceed his 

customary charge in the absence of special circumstances.