Insurance Term - Amount Charged versus Amount Allowed
A healthcare provider can charge a patient any amount for a product or service offered, but a health insurer may establish the maximum they will reimburse for a given covered product or service. The Amount Allowed is often less than the Amount Charged. Contracting or ‘in-network’ providers agree to accept the allowed amount (or tariff) which is also referred to as the maximum allowance based on an individual’s policy.
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