Which term describes the maximum amount that an insurer will reimburse for a service?

• A. Reimbursement amount
• B. Allowed amount
• C. Pt responsibility
• D. Provider charge

Answer: (B)

Allowed amount is the maximum dollar value an insurer will reimburse for a service under a plan. This amount serves as the basis for calculating how much the insurer pays after applying the deductible, coinsurance, and copays, and it is often set by negotiated rates with in-network providers. If a provider’s charge exceeds the allowed amount, the difference may be the patient’s responsibility, along with any remaining cost-sharing. The other terms describe the provider’s charge or the patient’s liability, but they do not denote the insurer’s maximum reimbursement.