The suppression of circulating current in modular multilevel converter (MMC) is essential for its efficient operation. Usually, the dominant second harmonic component of circulating current (CC) is suppressed to zero by injecting an opposite polarity voltage into the arm. This is popularly called as circulating current suppression control (CCSC). However, the CCSC method reduces the maximum value of modulation index lesser than unity, limiting the total power transfer capacity of MMC. To address this issue, a new method is proposed in this paper where one of the half-bridge submodules (HBSM) is replaced with a full-bridge submodule (FBSM) and the voltage required to suppress the circulating current is inserted in the arm with the help of FBSM negative insertion. The proposed method suppresses the circulating current without limiting the modulation index which allows the MMC to operate at its full power capacity. The efficacy of the proposed method is tested through PSCAD simulation results and also through preliminary experimental results.