The allowed amount is the most a health plan will pay for a health service. A health service could be a test, procedure, doctor visit, or other types of treatments or services. Your plan's in-network providers have signed a contract to provide services at a discount. They agree not to charge more than this allowed amount to members of the health plan.
Out-of-network providers may charge more than the allowed amount. If you see an out-of-network provider who charges more, you may have to pay the extra cost. You can avoid having to pay more by only using providers in your health plan's network.
Allowed amount may also be referred to as eligible expense, payment allowance, or negotiated rate.