CurrentFlorida BluePolicy 19-066

Institutional Payment Programs and Charge Based Reimbursement for Commercial Products - Overlapping Charges

Defines Florida Blue's reimbursement rules for institutional inpatient and outpatient claims where charge-based methodologies could cause overlapping or duplicate use of covered charges; applies to hospitals and ambulatory surgical centers under Florida Blue commercial products.

Policy Summary

PayerFlorida Blue

PolicyInstitutional Payment Programs and Charge Based Reimbursement for Commercial Products - Overlapping Charges

Policy CodePolicy 19-066

Change TypeNo material change

Effective DateSep 1, 2019

Next Review Date

Key ActionDeduct charges for separately reimbursed add-ons/carve-outs from total covered charges before calculating percentage-of-charge reimbursement to prevent double payment.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

short & long term acute, ASCprovider settings covered

alllines of business

add-ons, lesser of, outlierstopics covered

09/11/2025last revision

Charge Overlap Adjustment Rules

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Charge overlap adjustment rules

When charge-based reimbursement methods could reimburse the same covered charges more than once, the following adjustments apply:

Add-ons/Carve-outs: Charges for separately reimbursed add-ons or carve-outs (for example, implants payable at a flat rate or percentage of covered charges) are deducted from total covered charges before calculating any percentage-of-charge reimbursement for the remainder of the claim to prevent double payment.

Second dollar high-charge outlier where DRG > threshold: For second dollar high-charge outlier methodologies, if the DRG payment amount exceeds the high charge threshold, use the DRG payment amount in lieu of the threshold when determining the portion of covered charges reimbursed at a percentage to avoid overlapping reimbursement.

'Lesser of' logic

No add-ons: When 'lesser of' logic applies and there are no add-ons/carve-outs, cap the allowed amount at the total covered charges.
With add-ons: When 'lesser of' logic applies and add-ons/carve-outs exist, exclude add-on/carve-out charges when determining the cap for the remainder of the claim; each add-on/carve-out is then subject to its own 'lesser of' evaluation to avoid double reimbursement.

Applies to Florida Blue contractual reimbursement for inpatient and outpatient institutional claims (short term acute care, long term acute care, and ambulatory surgical centers) and documents treatment of overlapping charges in proprietary charge-based reimbursement programs.

Scope

Applicability and Payment Notice

Note

Not an authorization or guarantee of payment

This payment policy is not an authorization, certification, explanation of benefits, or guarantee of payment; benefits are determined by the group contract and member benefit documents. It applies to providers of institutional services under Florida Blue proprietary reimbursement programs and does not replace provider contract terms or member coverage determinations.

Definitions and Payment Concepts

Add-ons / Carve-outs

DefinitionAdd-ons/Carve-outs are specific services or items separately reimbursed (for example, implants payable at a flat rate or percentage of covered charges).

Treatment of chargesCharges for add-ons/carve-outs are deducted from total covered charges prior to calculating percentage-of-charge reimbursement for the remainder of the claim to prevent double payment.

PurposePrevent duplicate reimbursement when an add-on's allowed amount is added to the allowed amount for remaining services on the claim.

ExampleImplants payable at a flat rate or percentage — their charges are removed from total covered charges before percentage-based calculations for other services.

ApplicationApplies when a separate reimbursement methodology exists for the add-on/carve-out service or procedure; ensures the add-on is not effectively reimbursed twice.

Second-dollar high-charge outlier

DefinitionSecond dollar high charge outlier is a reimbursement methodology where total allowed amount equals a DRG base rate plus a percentage of the portion of covered charges exceeding a high charge threshold.

Typical calculationWhen high charge threshold exceeds the DRG payment amount, total allowance = DRG base rate + percentage of charges above the threshold.

Adjustment to avoid double paymentIf the DRG payment amount is greater than the high charge threshold, use the DRG payment amount in lieu of the threshold when determining the portion of charges reimbursed at a percentage to avoid overlapping reimbursement.

Overlap scenarioWhen the threshold is less than the DRG payment amount, charges between the threshold and the DRG payment would otherwise be considered twice without the adjustment.

"Lesser of" logic

Definition'Lesser of' logic is a contractual cap where, if total covered charges are less than the total allowed amount, the allowed amount is capped at the total covered charges.

No add-ons presentWhen no add-ons/carve-outs exist, Florida Blue caps the allowed amount at the total covered charge amount under 'lesser of' logic.

With add-ons presentWhen add-ons/carve-outs exist, their charges are excluded when determining the cap for the remainder of the claim; add-ons/carve-outs are subject to their own 'lesser of' evaluation.

PurposeExcluding add-on charges from the cap prevents the add-on from being effectively reimbursed twice when applying 'lesser of' logic to the remainder of the claim.

Document Revision Timeline

2019-09-01original_effective_date

Policy originally became effective.

2021-09-16annual_review

Payment Policy approved by Payment Policy Committee (annual review).

2022-09-15annual_review

Payment Policy approved by Payment Policy Committee (annual review).

2023-09-14annual_review

Payment Policy approved by Payment Policy Committee (annual review).

2024-09-12annual_review

Payment Policy approved by Payment Policy Committee (annual review).

2025-09-11revisionLatest

Policy revised and Payment Policy approved by Payment Policy Committee (annual review).

Policy Summary

PayerFlorida Blue

PolicyInstitutional Payment Programs and Charge Based Reimbursement for Commercial Products - Overlapping Charges

Policy CodePolicy 19-066

Change TypeNo material change

Effective DateSep 1, 2019

Next Review Date

Key ActionDeduct charges for separately reimbursed add-ons/carve-outs from total covered charges before calculating percentage-of-charge reimbursement to prevent double payment.

SourceLink

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