CPB (Certified Professional Biller) Certification Practice Exam

What is the term for the maximum amount that the payer will reimburse for each procedure or service based on the patient's policy?

1. Allowed Charge

2. Adverse Selection

3. All Patient Refined Diagnosis-Related Group

4. Ambulatory Surgical Center Payment Rate

The correct answer is: Allowed Charge

The term for the maximum amount that the payer will reimburse for each procedure or service based on the patient's policy is indeed "Allowed Charge." This concept is critical in medical billing, as it establishes the limit of payment that a healthcare provider will receive for a service rendered to a patient covered by a specific insurance plan. The allowed charge is often a negotiated rate between the healthcare provider and the insurance payer, reflecting the extent of coverage provided by the insurance policy for various medical services. Understanding allowed charges is essential for billers and coders, as it directly impacts revenue cycle management and determines how much will be billed to patients after payments by insurance are applied. This term is crucial for ensuring that providers are adequately reimbursed while also remaining compliant with insurance agreements.