Question

When an insurance company makes a payment to a medical practice for services rendered to a patient and the patient makes a payment on the account, causing it to exceed the allowed charges, what is this called?

1) Overpayment
2) Underpayment
3) Co-payment
4) Deductible

Answer 1

Overpayment

An overpayment in medical billing occurs when the sum of the insurance company's payment and the patient's payment exceeds the total allowed charges for services rendered.

This situation is distinct from a deductible, copayment, or coinsurance, all of which are forms of cost sharing that require the insured to pay some costs out-of-pocket.

Step-by-step explanation:

When an insurance company makes a payment to a medical practice for services rendered to a patient, and the patient also makes a payment causing the total to exceed the allowed charges, this scenario is referred to as an overpayment.

An overpayment occurs when the combined amount paid by the insurance company and the patient surpasses the cost of the medical services provided.

This situation may result in a refund to the patient or credit to their account. It is important to differentiate overpayment from terms like deductible, which is the out-of-pocket amount paid by a policyholder before insurance kicks in;

copayment, a fixed fee paid at the time of service; and coinsurance, where the policyholder is responsible for a certain percentage of the costs.