A provider bills $2,000 for a service. The payer's allowed amount is $1,200, and the provider is a participating (in-network) provider. What is the contractual adjustment (write-off)?

Explanation

A participating provider agrees to accept the payer's allowed amount as payment in full, so the difference between the $2,000 billed charge and the $1,200 allowed amount, which is $800, is written off. The patient cannot be balance-billed for that contractual adjustment. Only the deductible, copay, or coinsurance based on the $1,200 allowed amount may be collected from the patient.