For any specific service covered under Medicare, the lower of the customary charge by a particular physician for that service and the prevailing charge by physicians in the geographic area for that service. Reimbursement is based on the lower of the reasonable and actual charges. For example, suppose the prevailing charge for a fistulectomy is $100 in a certain locality, i.e., this is the 75th percentile of the customary charges for that service by the physicians in that locality. Dr. A’s actual charge is $75, although he customarily charges $80 for the procedure; Dr. B’s actual charge is his customary charge of $85; Dr. C’s is his customary charge of $125; Dr. D’s is $100, although he customarily charges $80; and there are no special circumstances in any case. The reasonable charge for Dr. A would be $75 since the reasonable charge cannot exceed the actual charge, even if it is lower than his customary charge and below the prevailing charge for the locality. The reasonable charge for Dr. B would be $85, because his customary- charge is lower than the prevailing charge for that locality. The reasonable charge for Dr. C would be $100, the prevailing charge for his locality. The reasonable charge for Dr. D would be $80, because that is his customary charge which is lower than the actual charge in this particular case. His reasonable charge cannot exceed his customary charge in the absence of special circumstances, even though his actual charge of $100 is the same as the prevailing charge. Generically, the term is used for any charge payable by an insurance program which is determined in a similar, but not necessarily identical fashion.