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Q  Is there a difference between price, cost and payment (negotiated contract rate)?
A Yes.

Charges
“Charges” refer to the prices providers set for each individual service rendered to patients. Charges serve as the starting point from which payment is negotiated. Most patients do not pay full billed charges for healthcare services.

Cost
A provider’s “cost” refers to the amount spent by the provider delivering services and includes all of the expenses involved in keeping its doors open, from supplies to utilities to labor.

Payment / Negotiated Contract Rate
“Payment” refers to the dollar amount paid by insurers – public or private – to providers for services rendered. The payment represents the results of the negotiation between the individual provider and the individual insurer. Payment also includes the amount received from patients directly for the deductible, coinsurance or co-pays as well as charges for services not covered by the insurance policy.


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