What term defines the maximum amount that will be reimbursed for covered health care services?

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The main idea is that the allowed amount is the maximum a health plan will reimburse for a covered service. It comes from the negotiated rate between the insurer and the provider and serves as the cap used to determine how much the plan will pay the provider and how much the patient owes after applying deductible, coinsurance, and copays. It’s different from the provider’s billed charge, which is usually higher, and from the patient’s actual responsibility, which can be the deductible/coinsurance/copay amount up to the allowed limit. In-network plans typically limit or prevent balance billing, while out-of-network situations can lead to higher patient costs.