Define contractual adjustment and the concept of the allowed amount.

• A. Contractual adjustment is the payer-negotiated reduction from billed charges; the allowed amount is what the payer determines is payable after write-offs.
• B. The contractual adjustment is the allowance the provider adds to the bill after-payer payment.
• C. The allowed amount is always equal to billed charges.
• D. The contractual adjustment applies only to out-of-network; the allowed amount is the patient's deductible.

Answer: (C)