Glossary · Payer
Glossary · PayerAllowed Amount
The maximum dollar amount a payer will reimburse for a covered service, set by the payer fee schedule or contract regardless of the provider's billed charge.
Definition
Allowed Amount.
The maximum dollar amount a payer will reimburse for a covered service, set by the payer fee schedule or contract regardless of the provider's billed charge.
Sources
Primary references for this entry.
- CMS Medicare Physician Fee Schedule.
- NAIC payer-contract guidance.
Related terms
Other terms in Payer.
- Payer
Accountable Care Organization (ACO)
A group of providers and suppliers that coordinates care for a defined population of Medicare or commercial patients and shares in the savings (or losses) generated against a benchmark.
Open entry - Payer
Capitation
A payment arrangement where the payer pays the provider a fixed amount per patient per period (PMPM, per member per month) regardless of services rendered. Common in Medicare Advantage and managed-Medicaid contracts.
Open entry - Payer
Coordination of Benefits (COB)
The process of determining which insurance plan pays first when a patient has multiple coverages, and how secondary or tertiary plans pay against the remaining balance.
Open entry - Payer
Fee-for-Service (FFS)
The traditional payment model where providers are paid a discrete fee for each billable service, as opposed to capitation (per member per month) or value-based contracts (per outcome).
Open entry - Payer
Medicaid
The federal-state program providing health coverage to low-income U.S. residents. Each state administers its own Medicaid program with its own fee schedule, prior-auth rules, and managed-care plans.
Open entry - Payer
Medicare
The federal health insurance program for people age 65 and older, certain younger people with disabilities, and people with End-Stage Renal Disease. Comprises Parts A (hospital), B (medical), C (Medicare Advantage), and D (drugs).
Open entry
Frequently asked
About Allowed Amount.
Talk to RCM
Ready to recover every dollar your practice earns?
See your projected revenue lift in 60 seconds, or talk to a senior RCM strategist now. No commitment. Same-day slots available.
- 30-day parallel-run guarantee
- Targets written into the contract
- HIPAA · SOC 2 Type II · HITRUST