Definitions
Health Insurance Terms
Allowed Amount

Allowed Amount

Definition:

The amount of the billed charge the insurance company considers payable by the plan.

Application:

A medical provider bills for an intermediate office visit. The amount the doctor charges is $75.00. The health insurance company allows $50.00 for an intermediate office visit as negotiated with the doctor. The benefit is then paid at 90% of this allowed amount of $50.00. The total payment is therefore $45.00.

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