1. In the Medicare program, the fee schedule amount for a medical service that is published annually by the Centers for Medicare and Medicaid Services (CMS). This fee is based on relative value units (RVUs) taking into consideration the physician’s work RVU, the practice expense RVU, and the malpractice insurance RVU. To bring the fees in line for the region where the physician practices and to adjust for regional overhead and malpractice costs, each of the RVUs is adjusted for each Medicare local carrier by geographic practice cost indices (GPCIs), pronounced “gypsies.” Sometimes this is called the approved charge. 2. Amount on which TRICARE figures the patient’s cost-share for covered care. This is based on 75% to 80% of the allowable charge.
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The lesser of the actual charge, the customary charge and the prevailing charge.