CMS Pub. 100-04, ch. 23, § 80.5

B3-5022, AB-02-136, B-02-089

Where there is insufficient actual charge data for determining the customary charge and/or

the prevailing charge in the locality for a particular medical procedure or service, A/B

MACs (B)/DME MACs must use one of the following gap-filling methods to establish the

needed screen.

A. Gaps in Customary Charge Screens

A/B MACs (B)/DME MACs fill a gap in a customary charge screen:

1. By applying a conversion factor derived from the physician’s (or supplier’s) known

customary charges for other services in the same category of service (medicine,

surgery, etc.) to a relative value scale in the manner suggested in §§80.3, or

2. By using the 50th percentile in the array of customary charges (weighted by

frequency) that was used to establish the prevailing charges for similar services for

the physicians in the same specialty and locality.

A/B MACs (B)/DME MACs must ensure that, where a 50th percentile charge is used as a

customary charge for payment purposes, the reasonable charge does not exceed either that

amount or the locality prevailing charge. Also, all A/B MACs (B)/DME MACs that use

50th percentile charges to fill gaps in their customary charge data must retain the capacity

to calculate and use conversion factors with relative value scales when this is appropriate.

B. Gaps in Prevailing Charge Screens

Where the A/B MAC (B) has not been able to establish a prevailing charge for a service

based on the prevailing charge screen procedures, then A/B MACs (B) must gap-fill the

payment amounts using a prevailing charge conversion factor (§80.5.1) and a relative value

scale, manually if necessary. (See §80.3 regarding charges for rare or unusual procedures.

This is to be used as a last resort.