C. Variation in range of prevailing charges

The range of prevailing charges in a locality may be different for physicians or suppliers who engage in a particular specialty practice or service than for those who are engaged in another type of specialty practice or in general practice or service. Existing differentials in the level of charges between different kinds of practice or service could, in some localities, lead to the development of more than one prevailing charge for application by the carrier in its determination of reasonable charges. Carrier decisions in this respect are responsive to the existing patterns of charges made by physicians and suppliers who render covered services, and establish differentials in the levels of charges between different kinds of practice or service only where this would be in accord with such patterns.

For example, a cardiologist may charge $25 for a specific examination while a general practitioner’s charge is $15 for a similar examination. Both charges are customary for each physician and fall within their respective ranges of prevailing charges in the locality. Thus, the charges made by each of these physicians may be accepted as reasonable charges.

There may be preeminent specialists whose charges reflect their special positions in the profession. The customary charges of such a physician are included with the customary charges of all specialists in the locality in establishing the prevailing charges for specialists in the same medical field. However, the customary fee for a service may not be determined to be the reasonable charge if it is higher than the prevailing charge for the procedure in the locality. In such a case, to obtain the reasonable charge, the customary charge is reduced to the prevailing charge.

For example, the prevailing charge for a particular service by specialists is $230. Dr. A’s customary charge is $220 and Dr. B’s customary charge is $225. Both of these charges are “reasonable.” But Dr. C who is renowned in the performance of the procedure has a customary fee of $300 for that service (Dr. C’s customary charge was considered in the array of charges to establish the prevailing charge.) The reasonable charge for Dr. C’s services is $230 since that is the prevailing charge for the service in that locality.