Question

A provider bills $400 for a test. The insurance pays $300 and the patient's responsibility is $23.56. What is the contractual discount and what is the patient's responsibility called?

1) $100, copay
2) $76.44, coinsurance
3) $100, coinsurance
4) $76.44, copay

Answer 1

The correct answer is $76.44 as the contractual discount and coinsurance for the patient's responsibility. A contractual discount is the amount the provider writes off, and coinsurance is a percentage of medical costs the patient pays.

Step-by-step explanation:

When a provider bills $400 for a test and the insurance pays $300, the difference of $100 is not paid by the insurance. This difference is known as the contractual discount, which is the amount the provider agrees to write off and not charge the patient as part of the agreement with the insurer.

The patient's responsibility in this scenario is $23.56. This amount is referred to as coinsurance, which is a fixed percentage of the medical cost that the insured must pay after the deductible is met and until the out-of-pocket limit is reached. This term and the amount differentiate it from a copay, which is a flat fee for a service that the insured pays.

Based on the given information, the correct answer to the question is: 2) $76.44, coinsurance. The contractual discount is $76.44, which is arrived at by subtracting the insurance's payment and the patient's responsibility from the billed amount ($400 - $300 - $23.56). The patient's responsibility is called coinsurance.