Cost sharing
Cost sharing is the portion of a covered service a patient pays — deductible, copayment, and coinsurance — calculated from the plan's allowed amount, not the billed charge.
Updated
Cost sharing is the share of a covered service that a health plan requires the patient to pay. Its three standard forms are the deductible (an amount the patient pays before the plan begins to pay), the copayment (a flat per-service amount), and coinsurance (a percentage of the allowed amount). Cost sharing applies to covered services and is calculated from the plan's allowed amount, not the provider's billed charge.
It is bounded by the plan's out-of-pocket maximum, after which the plan pays the full cost of covered services for the rest of the plan year.
In practice
Estimating cost sharing before service is what lets a practice tell a patient what they are likely to owe and collect some of it up front. Because it is calculated on the allowed amount and depends on where the patient stands against the deductible and out-of-pocket maximum on the date of service, an estimate is an estimate — the exact figure is set when the claim adjudicates.
Commonly confused with
- Non-covered service: Cost sharing is the patient's share of a covered service; a non-covered service is one the plan does not pay for at all, which the patient may owe in full.
- Contractual adjustment: A contractual adjustment is the amount written off under the payer contract; cost sharing is the patient's portion of the allowed amount.