What is the allowed amount?
The allowed amount is the maximum a payer will pay for a covered service, including both the payer’s payment and the patient’s share.
For an in-network provider, the allowed amount should equal the rate in the provider’s contract for that service. The difference between the billed charge and the allowed amount is written off as a contractual adjustment.
If the allowed amount on a remittance is lower than the contracted rate, the claim is underpaid, even if the payer paid its full share of that lower amount.
How to spot it
- Check the allowed amount, not just the paid amount. A payment can look right relative to the allowed amount while the allowed amount itself is wrong.
How Vareo helps
Vareo checks every line of your 835 remittances against your payer contracts, finds underpayments like this, and handles the appeals and follow-up. You pay only a share of what is recovered.
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Last updated October 11, 2026