definition of contractual adjustment in health care
CONTRACTUAL ALLOWANCE Definition. CONTRACTUAL ALLOWANCE, in healthcare, is the difference between what hospitals bill and what they receive in payment from third party payers, most commonly government programs; also known as contractual adjustment. Learn new Accounting Terms.
A: According to the St. Bernardine Medical Center, a contractual adjustment is part of the bill that a hospital has agreed not to charge a patient because of billing agreements with the patient's insurance company. It is the most common type of adjustment made by medical providers.
According to the St. Bernardine Medical Center, a contractual adjustment is part of the bill that a hospital has agreed not to charge a patient because of billing agreements with the patient's... According to the St. Bernardine Medical Center, a contractual adjustment is part of the bill that a hospital has agreed not to charge a patient because of billing agreements with the patient's...
Since the provider charges more than what the insurance company agrees to pay, the amount that is paid by the company is known as an allowable amount, and the amount above that is the reduction, made by the provider, called contractual adjustment.