What term describes the difference between billed and allowed amounts, written off as contractual adjustment?

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Multiple Choice

What term describes the difference between billed and allowed amounts, written off as contractual adjustment?

The key idea is how the write-off from a payer contract is recorded. The hospital charges the billed amount, but the insurer contract sets an allowed amount. The difference between the billed amount and the allowed amount is not paid and is written off as a contractual adjustment. In Epic Resolute this write-off is posted as Not Allowed Amount. It reduces the revenue from the full charge down to what the payer allows and does not represent money actually paid by the payer or patient. The other terms relate to amounts that are actually paid or the patient’s remaining balance after adjustments, not the write-off due to contract terms.

The key idea is how the write-off from a payer contract is recorded. The hospital charges the billed amount, but the insurer contract sets an allowed amount. The difference between the billed amount and the allowed amount is not paid and is written off as a contractual adjustment. In Epic Resolute this write-off is posted as Not Allowed Amount. It reduces the revenue from the full charge down to what the payer allows and does not represent money actually paid by the payer or patient. The other terms relate to amounts that are actually paid or the patient’s remaining balance after adjustments, not the write-off due to contract terms.

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