CPB Certified Professional Biller Certification Practice Exam

What defines an allowable charge in healthcare billing?

1. The maximum fee a provider can charge without penalties

2. The amount billed by the provider

3. The maximum amount a physician may charge as defined by the limiting charge

4. The rate negotiated between the insurer and provider

The correct answer is: The maximum amount a physician may charge as defined by the limiting charge

An allowable charge in healthcare billing refers to the maximum amount that a physician can bill for a service or procedure, as defined by the limiting charge. This concept is particularly significant in the context of Medicare and other insurance plans where certain regulations cap the amount that healthcare providers can charge beneficiaries. The limiting charge serves to protect patients from excessive fees in the event that a provider does not accept the assignment of the Medicare benefit. Understanding this definition is crucial because it determines the financial responsibility of patients and the reimbursement that providers can expect from insurance payers. In contrast, the maximum fee a provider can charge without penalties relates to broader regulatory compliance, the amount billed by the provider encompasses all charges, and the negotiated rate between the insurer and the provider focuses on their specific contractual agreements. These aspects do not fully capture the essence of what an allowable charge specifically denotes in the context of healthcare billing.