by Luke Shulman

How much is that service?

If you have ever tried to analyze healthcare claims data, you are likely looking at a flat file of several thousand claim lines each encoded to different HCPCS or ICD codes. Your goal is probably to measure some sort of cost. But what field reflects the true cost?

Consider the Colorado APCD medical claims layout, it contains fields for the Charge Amount, Paid Amount, Prepaid Amount, Co-Pay amount, Coinsurance Amount, Deductible Amount. That’s six different payment fields. Oregon has eight different fields. CMS Medicare Limited Data Set files have four for outpatient but six for inpatient. So if you want to measure how much something costs it can be complicated. We created this little table that should help you sort out which column is which.

We also recommend you checkout the State of Washington’s great factsheet on this issue.

Column AKA Definition Is it Populated? Best Use
Charge Amt Billed Amt, Submitted Charges, Requested Charges This is the amount requested of the payer by the provider who rendered the healthcare service attested to in the claim. It is amount the provider is billing the health plan or CVS. Not always. Many healthcare organizations consider their pricing to be proprietary and thus do not like the raw charge information to be disclosed. When you have access to unsubmitted claims from a provider this can be helpful in matching. This field is also great for news stories about funny prices
Allowed Amount Contracted amount, Price, eligible amount. Maximum amount that would be paid for this covered service based on the arrangement between provider and the payer. It is NOT the amount that was actually paid. Generally yes. But again as health care organizations are sometimes hesitant to reveal the negotiated prices between bodies this amount may be hidden or masked. This is the best use for measuring cost disparities because it is the price absent other factors related to insurance coverage and contracting. It also generally represents the maximum amount for which the service is worth rather than the charge price which could be a lot more. However for many use cases, you may be better-off using a normalized fee-schedule that would have the same prices across different payers.
Co-Insurance Amount The amount of patient payment that should have been collected from the patient as coinsurance. This is calculated as a percentage of the Allowed Amount. The patient liability amounts are usually all populated on most claims feeds. Measuring economic burden on families.
Co-Payment Amount The amount of patient payment that should have been collected from the patient as coinsurance. This is usually a fixed payment based on the service say $20. The patient liability amounts are usually all populated on most claims feeds. Measuring economic burden on families.
Deductible Amount The amount the patient is liable to pay in satisfaction of their deductible. The patient liability amounts are usually all populated on most claims feeds. Measuring economic burden on families.
Patient Liability Amt Patient Cost-Share Amt This is the sum of Coinsurance, Copayment, and Deductible. It represents the total amount the patient paid in satisfaction for this claim. Before the ACA, this amount may also reflect the amount the patient had to pay if the health plan had a lifetime maximum or other term that forced additional patient liability outside of copayment, coninsurance or deductible. The patient liability amounts are usually all populated on most claims feeds. Measuring economic burden on families.
COB AMT Third-Party Liability Amt. Other Carrier Amt The amount that will be paid by another insurance plan or carrier. this is usually the case where because of an accident or a dual-coverage situation multiple insurance payers are coordinating benefits (COB). Usually Available Can be used for studies of workers compensation or Medigap.
Fee-For-Service Equivalent Amount Prepaid Amt This is amount that would have been paid for this claim if the service had not been paid through some other arrangement such as capitation. Under capitated plans, the health plan may bundle certain services into a monthly payment that is paid upfront to the provider. The plan still requires claims be submitted for record keeping. Usually Available. It is very important to understand how this field is used in your claims analysis. For some plans, this is the preferred field for use in analysis because the “Allowed Amt” will be 0 for all claims that would be capitated. Others including CMS require you to apply logic to use this field if the paid/allowed amount is 0. See Prepaid Value
Paid Amt The amount paid to the provider by the health plan. This is usually calculated by taking the allowed amount and subtracting all the patient liability and COB amount. Then the health plan may apply more logic based the payment arrangement or capitation before arriving at this figure. yes There is often little reason to use this field directly unless you want to truly measure the health plans financial exposure. Because the payment arrangements between a health plan a provider system can be so complex, this field is not reflective of the service cost thus most analyses rely on a combination of FFS or Allowed Amt. An exception is CMS which due to ts market size has a more straightforward set fee schedule.

Ok, so there you have it. A quick reference to all the payment amounts you see on a claims feed or file. After all the machinations, the last one (paid amount) is amount that was paid. Is that really true? Well not really. Remember that between a large commercial insurer and a major hospital there could be billions of dollars flowing through these claims transactions. The actual money gets paid out a different schedule. The dollar amount in those payments can sometimes have interest (if they are paid late) or they can be reduced if there was some sort of past overpayment (even a negative balance is not unheard of). I bring this up because if you are sitting at a health system trying to reconcile a patient account that consideration might be important. For the rest of us, it is just interesting.