Approved charge – Financial Terms

With traditional fee-for-service health insurance, the insurance company sets an approved or allowable amount for each medical procedure or office visit. If the visit or procedure costs more than the approved charge, the difference between the approved charge and the claim you submit to the insurance company for reimbursement is considered an excess charge. The company will not pay it.

Medicare also establishes approved charges for medical procedures and office visits. If you participate in an Original Medicare plan, there is also a legal limit on what a doctor, laboratory, or other medical provider can charge over and above the approved amount.