What is an “allowed amount” and who sets the prices I pay?
An allowed amount is the amount an insurer decides is a fair price to pay for a drug or service. Providers in a health plan’s network usually agree to it. If your provider is not in-network, your insurer will decide how much they’ll pay based on factors such as:
- The amount accepted by in-network providers
- Amounts other providers in the same area charge for the service
- A percentage of the charges that Medicare pays providers for the same service