- Introduction
- About Provider Outreach and Education
- ABN for Not Reasonable and Necessary Denials
- Appeals/Reopenings
- Assignment of Benefits
- Comprehensive Error Rate Testing
- CMS-1500 Claim Form
- Deceased Beneficiary Claims
- Electronic Data Interchange
- Evaluation and Management Services
- Fraud and Abuse
- Health Professional Shortage Area
- Hospice
- Limiting Charge
- Medical Policy Development
- Medigap
- Modifiers
- Nonphysician Practitioners
- National Provider Identifier
- Participation Program
- Payment Floor Standards
- Provider Enrollment
- Refunds and Overpayments
- Ordering and Referring Claims Information
- Return/Reject
- Standard Remittance ANSI Codes and Remittance Advice
- Appendix 1: Forms
- Appendix 2: Glossary
- Appendix 3: Place of Service Codes
Medicare Part B 101 Manual
Limiting Charge
Table of Contents
Federal Limiting Charge
As part of the Omnibus Budget Reconciliation Act of 1989 (OBRA 89) a balance billing limit, known as “limiting charge,” was enacted. Effective January 1991, all unassigned claims filed by nonparticipating physicians were subject to charge limits for services rendered to a Medicare beneficiary.
In 1992, the federal limiting charge was 120 percent of the nonparticipating physician fee schedule. During 1993 and after, the limiting charge was reduced to 115 percent of the nonparticipating physician fee schedule amount.
Effective January 1994, all services covered under the physician fee schedule are subject to the limiting charge provisions, regardless of the provider type for unassigned services.
The OBRA 89 included simplification of the rules governing charge limits on unassigned claims of nonparticipating physicians. As a result, Centers for Medicare & Medicaid Services (CMS) created the Comprehensive Limiting Charge Compliance Program to inform physicians about the application of these rules so that excesses to the limiting charge can be avoided. This program advises the physician promptly when excesses do occur so that the physician can take corrective action both on the case identified and on future Medicare claims.
The second component of the Comprehensive Limiting Charge Compliance Program is notification to beneficiaries on their MSN of the same claims being reported to the physician. The MSN will also inform beneficiaries how much the physician, other practitioner or supplier can legally bill for that service. Beneficiaries already get messages explaining liability limitations.
Additional components of this program are to re-examine the data for each physician receiving these notices to monitor the volume and pattern of cases with excess charges, total dollars involved, verification of refunds, and other factors that may indicate greater education and attention is needed to achieve compliance.
For those who are unresponsive to Medicare efforts to alert them of excessive charges, Medicare must take necessary steps to enforce compliance. Section 1848(g) of the Act describes limiting charges, and Section 1842(j) describes civil money penalties of up to $2,000 per violation plus the amount of applicable excess charges for willful, knowing repeated violation of limiting charges. A physician may also be excluded from providing services to Medicare beneficiaries for up to five years for repeated noncompliance.
Federal Limiting Charge for Medicare Secondary Payer
The Social Security Act Amendment of 1994 extends the limiting charge provision to include situations involving nonparticipating physicians submitting unassigned claims to primary insurers when Medicare is the secondary insurer. This law prohibits a nonparticipating provider who does not accept assignment from billing or collecting amounts above the limiting charge amount. This is regardless of whoever is responsible for payment.
If a patient is covered by Medicare, nonparticipating providers must not bill over the federal limiting charge to the primary insurer when Medicare is the secondary payer. This law is effective for any date of service after 12/31/1994.
Reviewed 9/29/2023