Hospital billing terms, in plain language

Billed charge

The hospital's full list price for a service, before any insurance negotiation or discount. Almost nobody actually pays this — it is mainly a starting point, and the number an insurer's discount is measured against. It is also the figure a hospital bill often shows first, which is why a bill can look far larger than what you end up owing.

Every hospital must publish these. The figures on this site's price pages come from those published files.

Negotiated rate

The specific dollar amount a hospital and a particular insurance plan have privately agreed the hospital will be paid for a service. Two plans at the same hospital can have very different negotiated rates for the identical service, and neither has to resemble the billed charge.

A negotiated rate is not what you pay. It is what the hospital and the insurer agreed between themselves. What you owe is a share of it, decided by your deductible and coinsurance — see how the four numbers fit together.

Allowed amount

The figure your insurer bases its payment on — and the one your deductible and coinsurance are calculated against. This is the number that decides your share.

When your provider is in-network, the allowed amount is normally the negotiated rate: the same figure under a different name, which is why the two words are so often confused. Out of network there is no negotiated rate, so the plan sets an allowed amount itself — and the provider has not agreed to accept it, which is how balance billing happens.

Cash price

What a hospital charges patients paying without using insurance at all. Often discounted from the billed charge, and set independently of any insurer's negotiated rate — so it is sometimes lower than what your own plan has agreed to pay.

Worth checking, with one catch: paying cash usually does not count toward your deductible or out-of-pocket maximum, so it is the better deal mainly if you would not have met either this year. Every price page on this site shows the cash price beside the negotiated one where the hospital publishes both.

Amounts generally billed (AGB)

A legal cap, not a price. If you qualify for a nonprofit hospital's financial assistance policy, federal law limits what it may charge you for emergency and other medically necessary care to no more than the amounts it generally bills patients who have insurance.

In practice that means someone who qualifies should never be charged the full billed charge — the number uninsured patients are most often billed. How AGB is calculated, and how to find your hospital's figure.

Premium

What you pay each month to have coverage at all, whether or not you use any care. It is completely separate from what a service costs: the premium buys the insurance, and the deductible, coinsurance and copay decide what you pay on top when you actually use it.

A common and expensive surprise is that a low premium usually comes with a high deductible. The premium is not a measure of what your care will cost you.

Deductible

The amount you pay out of pocket for covered care each year before your insurance starts paying its share. A $2,000 deductible means you generally pay the first $2,000 of allowed amounts yourself.

This is why the negotiated rate matters to you even though it is an agreement between other parties: below your deductible, you are usually paying that rate in full.

Coinsurance

The percentage of the allowed amount you are responsible for after your deductible is met — a plan with 20% coinsurance has you pay 20%, with the insurer covering the rest. Because it is a percentage of a number you can now look up, a cheaper hospital genuinely costs you less.

Copay

A fixed dollar amount (like $30) you pay for a specific type of visit or service, regardless of the negotiated rate behind it. Common for office visits and prescriptions, less common for major procedures — where coinsurance usually applies instead.

Out-of-pocket maximum

The most you can pay in covered costs in a plan year. Once you reach it, your plan pays the full allowed amount for covered in-network care for the rest of the year. Deductible, coinsurance and copays count toward it; premiums do not, and neither do out-of-network balance bills.

In-network and out-of-network

A provider or facility that has a negotiated contract with your specific insurance plan is "in-network" — your plan pays more of the bill and your cost-sharing is lower. "Out-of-network" providers have no such contract, and historically could bill you for the full difference, though the No Surprises Act now blocks that in several common situations.

Network status is per plan, not per insurer: a hospital can be in-network for one plan from a company and out-of-network for another.

Explanation of Benefits (EOB)

A statement your insurer sends after a claim, showing what was billed, what they paid, and what you owe. It is not a bill — the hospital bills you separately, and the two documents should roughly match. It is also where you will see the allowed amount written down, usually next to a much larger billed charge.

Balance billing

When an out-of-network provider bills you for the gap between what your insurer paid and their full charge. Now illegal in the situations covered by the No Surprises Act — most importantly emergency care, and out-of-network clinicians treating you at an in-network hospital.

Financial assistance / charity care

Free or discounted care that qualifying patients (usually based on household income) can get from a hospital — a legal requirement for nonprofit hospitals, and available at many others by policy. Qualifying also caps what you can be charged: see amounts generally billed.

See how it works and who has to offer it, or look up a specific hospital's income thresholds from the hospital list.

Good Faith Estimate

A required upfront cost estimate a hospital must give uninsured or self-pay patients for a scheduled service, before they receive it. Worth asking for in writing — particularly at hospitals that price admissions as a percentage of the final bill rather than a fixed amount, where no published figure can tell you the total in advance.

CPT / HCPCS code

The standardised codes hospitals use to bill for specific procedures and services — the "code" this site lets you search by, and the thing that makes two hospitals' prices comparable at all. Inpatient stays use a different system, MS-DRG, which prices a whole admission rather than a single service.

The code on your bill is the most precise way to look up what others charge: try it in the code search.

Payer

The entity paying the claim — usually an insurance company (like Aetna or Blue Cross), but sometimes Medicare, Medicaid, or a workers' compensation carrier. Each payer typically negotiates its own rate with a given hospital, which is why one hospital publishes dozens of different prices for the same service.