Allowable Charge

The Plan has established the method for determining the amount that it considers to be a reasonable price for a covered service or supply. This amount is referred to as the Allowable Charge, and is the basis for the Plan’s determination of how much it will pay with respect to a service or supply. For services or supplies that are subject to deductible and/or coinsurance, the Allowable Charge also is the amount by which your deductible and coinsurance obligations are determined. The Allowable Charge applies to all services and supplies covered by this Plan.

The Allowable Charge will always be a negotiated rate, if one exists. If no negotiated rate exists, the Allowable Charge will be determined as follows.

With respect to the following services and supplies, the Allowable Charge will be determined by the Plan to be the Medicare reimbursement rates* currently used by the Centers for Medicare and Medicaid Services (“CMS”) multiplied by the applicable percentage described below:


Professional Services and Supplies Percentage
Primary Care
& Specialists
Evaluation & Management Codes 120%
All Other Codes (except as described below) 140%
Durable Medical Equipment (DME), purchase or rental, and services provided in-home 105%
Physical Therapy, Occupational Therapy, and Speech Therapy 100%
Medications (when separately reimbursable)  106%
Laboratory & Pathology  100%
The Medicare reimbursement rate for all professional services and supplies (claims submitted on a CMS 1500 or equivalent) shall be the prevailing Medicare locality rate based on the service location submitted on the claim.
Facility Services and Supplies Percentage
Inpatient Services (except as described below)
Routine Delivery
Routine Nursery
Neonatal Intensive Care Unit (NICU) or Intensive Care Nursery (ICN)
Skilled Nursing and Rehabilitation Services


Ambulatory Surgery Center 150%
Outpatient Services (except as described below)
Durable Medical Equipment (DME)
Laboratory & Pathology (when separately reimbursable)
Physical Therapy, Occupational Therapy and Speech Therapy
Medications (when separately reimbursable)
Home Health and Hospice
Default: All other facility services and supplies not listed elsewhere 150%
The Medicare reimbursement rate for all facility services and supplies (claims submitted on a UB04 or equivalent) shall be based on the applicable provider's current prevailing Medicare rate. 
Other Percentage
Ground Ambulance 150%
Air Ambulance 200%
For any service or supply for which a percentage is not described in the above table, the Allowable Charge will be 150% of the applicable Medicare reimbursement rates. 

* If no Medicare reimbursement rate can be calculated with respect to a given claim, the Medicare reimbursement rate will be based on the most appropriate of the following, in the Plan Administrator’s discretion:

  • Visium Medicare Equivalency tables (prices established by CMS utilizing standard Medicare Payment methods and/or based upon supplemental Medicare pricing data for items Medicare doesn’t cover based on data from CMS);

  • Visium Approximation tool (prices established by CMS utilizing standard Medicare payment methods and/or based upon prevailing Medicare rates in the community for non-Medicare facilities for similar services and/or supplies provided by similarly skilled and trained providers of care); or

  • Visium Care Crosswalk (prices established by CMS utilizing standard Medicare payment methods for items in alternate settings based on Medicare rates provided for similar services and/or supplies paid to similarly skilled and trained providers of care in traditional settings).

  • For medications for which there is no available Medicare pricing, the rate will be the lesser of the billed charge or the amount determined according to the following hierarchy: 

    • 106% of the drug’s average sales price (ASP)

    • 65% of the drug’s average wholesale price (AWP)

    • 105% of provider’s acquisition cost

If and only if none of the above four bullets is applicable, the Plan Administrator will exercise its discretion to determine the Allowable Charge based on any of the following: Medicare cost data as reflected in the applicable individual provider’s cost report(s); AWP and/or manufacturer’s retail pricing (MRP); Medicare cost-to-charge ratios or other information regarding the actual cost to provide the service or supply; or amounts actually collected by providers in the “area” (defined as a metropolitan area, county, or such greater area as is necessary to obtain a representative cross-section of providers, persons or organizations rendering such treatment, services, or supplies for which a specific charge is made) for similar services. These ancillary factors will take into account generally-accepted billing standards and practices.

The following provisions also apply to the determination of the Allowable Charge:

  • If the amount billed by the provider is less than the amount that is otherwise determined to be the Allowable Charge, the amount billed by the provider shall be the Allowable Charge (unless the amount billed is a negotiated rate).
  • If multiple treatment options are available and equally effective, the least costly option generally will be utilized to determine the Allowable Charge.
  • The Allowable Charge will not include amounts which, in the Plan Administrator’s discretion, is charged for services or supplies that are unreasonably caused by the treating provider, including errors in medical care that are clearly identifiable, preventable, and serious in their consequence for patients. A finding of provider negligence or malpractice is not required for services or fees to be considered ineligible pursuant to this provision.
  • The Plan Administrator has the discretionary authority to decide if a charge is covered under this Plan. The determination that fees for services are includable in the Allowable Charge will be made by the Plan Administrator, taking into consideration the findings and assessments of: (a) national medical associations, societies, and organizations; (b) the Food and Drug Administration; and (c) other relevant sources. 
  • To be includable in the Allowable Charge, services and fees must be in compliance with generally accepted billing practices for unbundling or multiple procedures. The Allowable Charge will not include any identifiable billing mistakes including, but not limited to, up-coding, duplicate charges, and charges for services not performed. 
  • For any situations when this SPD or other plan documentation is silent about claims administration or payment, the Plan will follow the Medicare payment methodologies. The Plan Administrator may modify the application of standard Medicare payment edits in its discretion.

The Plan Administrator may in its discretion, taking into consideration specific circumstances, deem a greater amount to be payable than the lesser of the amounts otherwise described in this definition of Allowable Charge. The Plan Administrator may take any or all such factors into account but has no obligation to consider any particular factor. The Plan Administrator may also account for unusual circumstances or complications requiring additional or a lesser amount of time, skill and experience relating to a particular service or supply, industry standards and practices as they relate to similar scenarios, and the cause of injury or illness necessitating the service(s) and/or charge(s).

Allowable Charges do not include any charge determined by the Plan to be the result of fraud, waste, or abuse (see “Exclusions Related to Fraud, Waste, and Abuse”).