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What is an "Allowed Amount?"

Allowed amounts are determined by an insurance company.  As all doctors determine their own fees, an insurance company takes the average of those fees in a geographic area by that type of provider (i.e. cardiologist, podiatrist, etc.) to determine what amount is fair.  This is called ‘Reasonable & Customary.’  Depending on the type of contract your doctor has with your insurance company the allowed amount for a service may be even lower than the Reasonable & Customary amount in that locale.


Part of the "Understanding Insurance" series.  

Brandt R Gibson, DPM
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Podiatrist, Neuropathy Doctor, Father of 11 and Founder of Mountain West Foot & Ankle Institute

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