What Does the CHAMPVA Allowable Amount Mean?

If you are enrolled in CHAMPVA or are planning to, you need to know what is meant by the term “allowable amount.”  You will encounter this often because it is the CHAMPVA allowable amount that determines how much the program will pay for your health care.

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CHAMPVA Allowable Amount Explained

The CHAMPVA allowed amount is the maximum charge that CHAMPVA will permit for a covered service or supply.  Often it is smaller than what a provider would otherwise charge the beneficiary.

To determine the allowed charge, CHAMPVA will need details about the service or supply such as the type of procedure and diagnosis, date and location of the service.

The allowed amount for a particular service or supply can be known once CHAMPVA processes a claim for it. You will find the information in the claim’s Explanation of Benefits or EOB.

How the Allowable Amount Is Determined

CHAMPVA observes an exact policy to determine how much payment it will authorize for a claim.  The allowable amount is the lowest of:

  • The CMAC or CHAMPVA Maximum Allowable Charge
  • The prevailing charge, which is the highest rate that a professional may reasonably charge for that particular service
  • The provider’s actual billed charge for that service

The CMAC rates are the same as what TRICARE and Medicare pay for similar services under those respective programs.  If there is neither a CMAC nor a prevailing charge, the original billed amount will be allowed.

Of course, the calculation details are more involved than that, but this will not concern most CHAMPVA beneficiaries.  For a more exhaustive treatment, see the CHAMPVA Policy Manual, Chapter 3, Section 5.1.  Said document explains how payment for professional outpatient and inpatient providers is calculated.

Sharing in the CHAMPVA Allowable Amount

The concept of an allowed amount is tied to that of cost sharing.  CHAMPVA is a cost sharing health coverage program.  That means the VA only shares in the cost of your health care expenses; you pay a portion of it as well.

The allowable amount is equal to what CHAMPVA pays the provider plus your cost share.  This is how it works:

When you have met your CHAMPVA deductible, the VA will first its share of the determined allowable amount.  Usually this is 75% of the total.  After that, you, the beneficiary, will pay your cost share or co-payment, which is typically 25%. If you have reached your annual catastrophic cap, however, your cost share is waived and CHAMPVA pays the full amount.

If you have a supplement to CHAMPVA, and you’ve met its conditions, it should pay for your cost share instead.

Benefits of CHAMPVA Allowable Amount

Evidently, the CHAMPVA allowed charge can save you money.  Therefore it is beneficial to see only a provider who agrees to accept as full payment the CHAMPVA allowable.  Not all providers do this, so don’t assume yours will.  Verify acceptance first, before you make an appointment.  If you see a provider anyway even after they’ve told you they don’t accept CHAMPVA, you will be responsible for the entire medical bill you get, which may be far bigger than what the allowable amount would have been.

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This website, CHAMPVAbenefits.com, is NOT affiliated with the Department of Veterans Affairs or any part of the U.S. government. Please DO NOT send us information about yourself such as your SSN, name, address, etc. for help with CHAMPVA…. The pharmacy network for CHAMPVA now is Catamaran (formerly SXC)…. Further, we cannot guarantee that the information here is accurate and up-to-date. To ensure you have the latest information, please visit the official CHAMPVA home page at http://www.va.gov/hac/forbeneficiaries/champva/champva.asp. Your use of this site means you agree to and understand this disclaimer. Thank you!

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