Sum set by an insurance company as the greatest amount that it will pay for a specific medical benefit or procedure. Third-party actual payment may be less than the maximum allowable because of the insured’s deductible and coinsurance. Also called maximum allowable charge, maximum allowable amount, allowed amount , or approved amount .

Formerly a provision of the Medicare program that affected nonparticipating (nonpar) physicians before January 1, 1991. It set a limit on fees billed by a nonpar provider for professional and incident to professional services. This system was replaced with the resource-based relative value scale (RBRVS). See limiting charge .

Highest amount a health care provider or pharmacy vendor who participates in an insurance plan may be paid for a specific service to members of the plan under a certain contract. Also called fee maximum, maximum allowable, maximum allowable amount, allowed amount , or approved amount .

Pharmacy benefit manager (PBM) or insurance health plan’s schedule or table that shows the greatest price they will pay for a generic drug. It is usually a dollar amount that is near the low end of the price scale. Participating pharmacies receive this list, and it may be reviewed from time to time by the PBM or health plan. If a member of the plan orders a brand name, he or she must pay the difference between the MAC price and the brand. See drug price review (DPR) .

1. Federal regulation that limits payment for prescription drugs under the Medicaid program. 2. Administration of a pharmacy benefit manager’s (PBM’s) or insurance health plan’s maximum allowable cost (MAC) list. See maximum allowable cost (MAC) list .

Largest dollar amount established by a managed care plan that a physician may charge for a medical service or procedure.

Largest dollar amount that an insured may receive under an insurance policy. This insurance provision may be set annually or for the lifetime of the policy. It is generally indexed to inflation so that it increases as price levels increase.

Greatest length of time that benefits are payable in any one period of disability. Also called indemnity limit .

Insurance rider that may be seen in basic hospital and surgical policies. It limits the maximum benefits for hospital confinements and for surgery done during one episode of illness or for any single injury.