Which term describes the maximum reimbursement calculated by the payer, coming from the payer's remittance?

• A. Paid Amount (Posting Term)
• B. Reason Codes
• C. Allowed Amount (Contract term)
• D. Follow-Up Record

Answer: (C)

Understanding how payer remittance communicates the maximum reimbursement is key. The allowed amount is the contractual maximum the payer will reimburse for a service, as defined in the payer’s contract and shown on the remittance advice. This amount establishes the ceiling for payment and serves as the baseline for determining what the patient may owe after any adjustments, write-offs, or copays. The actual payment you receive from the payer can be equal to or less than this amount once post-payment adjustments are applied. Reason codes explain why amounts were adjusted but are not the payment itself. Follow-up records are used for tracking claim actions, not for representing reimbursement.

So, the term that describes the maximum reimbursement calculated by the payer from the remittance is the allowed amount.