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Back  RFI # 643: Allowed/Approved/Covered AMT

Formal vs. Informal Help Informal Formal

Submitter

Cynthia Anaya

Description

We found that there is terminology used in the 837 claim, 2320 loop that are at issue and not defined how they are used in the 835 that is very confusing for COB claims processing. Could the 835 workgroup validate the information below in regard to Allowed/Covered/Approved amounts?

Allowed Amount is the billed charge minus Contractual Discounts
Covered Amount is the Allowed Amount minus the Non Covered Charges or Deductible
Approved Amount is the Allowed Amount minus the Non Covered Charges or Deductible


Within the 835 the Covered Amount for the claim is reported in 2100 AMT Segment using qualifier AU and notes indicate that it is not part of the financial balancing of the 835. The Allowed Amount for an individual service is reported in the 2110 AMT segment using qualifier B6. Is there somewhere that the Approved Amount should be returned and a part of the 835 balancing?

Submitter Assigned Keywords

allowed approved covered AMT COB

Response

All of the amounts have been removed from the next generation of the 837 guides. The following definitions relate to the 835 only.
Allowed Amount-Fee schedule (contracted/legislated providers) or healthplan’s usual and customary amount (non-contracted providers) based on patient's benefit plan and network, and any related contract/legislative requirement that exists between the provider and the healthplan/employer. It applies to the service performed or product dispensed.
Covered Amount–Amount considered payable under the patient’s benefit plan, including cost sharing amounts, ie, deductibles. It is based on the contract that exists between the employer and healthplan.
There is no Approved Amount qualifier in the 835 guide.

Recommendation

While there is no approved qualifier in the 835, the WG recognizes that providers and subsequent payers have a need to calculate an approved amount for COB. The WG recommends: For professional, dental, and NCPDP claims, the approved amount is the sum of all the allowed amounts. For institutional claims, approved amount is equal to the allowed amount; for example, DRG amounts.
Submission 4/17/2008
Status Date 1/8/2009
Status F - Final
Primary References
Document 004010X91A1
Sectionxxxxx
Page135
Set IDxxxxxx
Loop2100