Quick Answer: What Is Maximum Allowable Charge?

What does maximum allowable charge mean?

Allowable Charge.

-also referred to as the Allowed Amount, Approved Charge or Maximum Allowable.

See also, Usual, Customary and Reasonable Charge.

This is the dollar amount typically considered payment-in-full by an insurance company and an associated network of healthcare providers.

What is allowable charge?

An allowable charge is an approved dollar amount that a health insurance company will reimburse a provider for a certain medical expense. It is often referred to as an approved charge or an allowed amount. The allowed amount is the amount your insurance carrier is willing to pay for the rendered service.

What is an allowable amount for health insurance?

Allowable Amount for Insurance Claims. The allowable amount (also referred to as allowable charge, approved charge, eligible expense) is the dollar amount that is typically considered payment-in-full by an insurance company and an associated network of healthcare providers.

Can a dentist charge more than the amount allowed by insurance?

Being “In Network” dictates the maximum fee the dentist may charge for treatment procedures allowed by the insurance company. The dentist then cannot charge more than the contracted fee for allowed procedures.) Your dentist has NO relationship beyond this agreement with your insurance company!

What is the difference between allowed amount and paid amount?

The allowed amount is the maximum amount a plan will pay for a covered health care service. May also be called “eligible expense,” “payment allowance,” or “negotiated rate.” If a provider charges more than the plan’s allowed amount, beneficiaries may have to pay the difference, (balance billing).

How do insurance companies determine allowed amounts?

Your health insurance company sets a price it will pay for each CPT code called an allowed amount. This is the maximum price your insurance will pay for that specific code. The price is specific to your particular insurance policy. Another policy with the same insurance company could set a totally different price.

What is a plan allowance?

Allowed Amount. The maximum amount a plan will pay for a covered health care service. May also be called “eligible expense,” “payment allowance,” or “negotiated rate.” If your provider charges more than the plan’s allowed amount, you may have to pay the difference. ( See Balance Billing)

What is the Medicare allowable amount?

The allowable fee for a non-participating provider is reduced by five percent in comparison to a participating provider. Thus, if the allowable fee is $100 for a participating provider, the allowable fee for a non-participating provider is $95. Medicare will pay 80% of the $95.

How does the birthday rule work for insurance?

The birthday rule says that the health plan of the parent whose birthday is first in the calendar year is primary coverage for the children, and the plan of the parent with the later birthday is be secondary. If you are listed on each other’s health plans, then that coverage would be secondary for each of you.