What is the "approved amount" in the context of Medicare Part B?

The approved amount in the context of Medicare Part B refers to the specific amount that Medicare considers reasonable for a covered service provided by a healthcare professional. This determination is based on various factors, including the type of service being provided, existing fees in the local area, and the established pricing guidelines from Medicare. When a healthcare provider submits a claim for a service, Medicare evaluates the claim against these criteria to establish the approved amount.

This amount is significant as it directly affects the patient’s out-of-pocket costs. Patients are generally responsible for paying any deductibles and coinsurance based on this approved amount rather than the total amount billed by the provider, which can sometimes be higher. Therefore, understanding the approved amount is essential for both patients and providers, as it helps in clarifying the financial responsibilities associated with healthcare services under Medicare Part B.