HI 00401.305 Reasonable Charge
The reasonable charge is the basis of payment under SMI for medical and other health services furnished by physicians, medical groups, independent laboratories, suppliers of ambulance services, and suppliers of durable medical equipment, prostheses, etc.
The carrier has primary responsibility for determining reasonable charges.
The reasonable charge determinations made by carriers are not normally reviewed by CMS on a case-by-case basis. However, the Administration has an overall responsibility for the administration of the SMI program. The basic methods and procedures used by carriers in determining reasonable charges must be consistent with the law, the regulations, and the broad principles and policy guidelines issued by CMS.
The following guidelines are used by carriers to assure overall consistency with respect to the concepts they apply in making reasonable charge determinations.