CurrentFlorida BluePolicy 19-066

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

Defines how Florida Blue calculates allowed amounts for institutional inpatient and outpatient claims when charge-based reimbursement methodologies could cause the same covered charges to be used more than once; applies to hospitals and ambulatory surgical centers under Florida Blue commercial programs.

Policy Summary

PayerFlorida Blue

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

Policy CodePolicy 19-066

Change TypeNo material changes

Effective DateSep 11, 2025

Next Review DateN/A

Key ActionRemove add-on/carve-out service charges from total covered charges before calculating reimbursement for the remainder of the claim when reimbursement is based on a percentage of charges.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

short & long term acute, ASCprovider types covered

add-ons / implantsexamples of separately reimbursed items

second-dollar outlierhigh-charge outlier guidance

applies when charges < allowed'lesser of' rule

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.

Overlap and Double-Count Prevention

Overlap and double-count prevention rules

When charge-based methodologies overlap or could double-count charges, apply the following principles:

Remove add-on/carve-out service charges from total covered charges prior to calculating reimbursement for the remainder of the claim when the remainder is calculated as a percentage of charges to avoid reimbursing charges twice.

For second-dollar high charge outlier methodologies, if the DRG payment amount is greater than the high charge threshold, use the DRG payment amount instead of the threshold when determining the portion of covered charges reimbursed at a percentage to prevent overlap/double reimbursement.

When 'lesser of' logic applies and there are no add-ons/carve-outs, cap the allowed amount at the total covered charges.

When 'lesser of' logic applies and add-ons/carve-outs exist, exclude add-on/carve-out charges from the determination whether 'lesser of' applies to the remaining services; add-ons/carve-outs remain subject to their own reimbursement terms and separate 'lesser of' assessment to avoid double payment.

Applicability note: This policy applies to inpatient and outpatient institutional claims for applicable facility types and is subject to group contract and member benefit terms which may supersede this policy.

Billing and Coding

Billing and codingmixed

No specific billing or coding guidance provided (N/A)

High charge threshold logic

RuleIf 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 covered charges reimbursed at a percentage.

PurposePrevents overlap/double reimbursement when charges between the threshold and DRG amount would otherwise be counted twice.

Calculation impactUse DRG payment amount as the effective threshold for computing the percentage-based portion of the total allowed amount.

Applicability and Limitations

Note

Applicability and limitation

This policy applies to Florida Blue's contractual reimbursement for inpatient and outpatient institutional claims and to all lines of business and providers of service. It does not address every payment issue; group contract provisions, member benefit booklets, or legislative mandates may supersede this policy.

Key Definitions

Add-ons / carve-outs

DefinitionAdd-ons/carve-outs are services or items separately reimbursed with their allowed amount added to the allowed amount for the remaining services on the claim (example: implants).

TreatmentCharges for add-ons/carve-outs are deducted from total covered charges prior to calculating percentage-based reimbursement for the remainder of the claim to avoid double payment.

ExamplesImplants payable at a flat rate or a percentage of covered charges.

Second-dollar high charge outlier

DefinitionSecond-dollar high charge outlier: total allowed amount = DRG base rate + a percentage of the portion of charges that exceed the high charge threshold.

Typical caseTypically the high charge threshold exceeds the DRG payment amount, so total allowance = DRG payment + percentage of charges above threshold.

Adjustment ruleIf the high charge threshold is less than the DRG payment amount, use the DRG payment amount instead of the threshold to prevent double reimbursement of charges between threshold and DRG amount.

'Lesser of' logic

Standard 'lesser of'When total covered charges are less than the total allowed amount and there are no add-ons/carve-outs, Florida Blue caps the allowed amount at the total covered charges.

Add-on exclusionIf add-ons/carve-outs exist, their charges are excluded when determining whether 'lesser of' applies to the remaining services; add-ons/carve-outs are subject to their own 'lesser of' assessment.

RationaleExcluding add-on/carve-out charges prevents those charges from being reimbursed twice when applying 'lesser of' logic to the rest of the claim.