Certified Revenue Cycle Representative (CRCR) Practice Exam

What is the definition of "Charge" in healthcare billing?

1. The final price after insurance negotiations

2. The dollar amount a provider sets for services before discounts

3. The average payment made by insurance companies

4. The total cost incurred by a patient for services rendered

The correct answer is: The dollar amount a provider sets for services before discounts

In healthcare billing, the term "Charge" refers to the dollar amount a provider sets for services before any discounts or adjustments are applied. This is the initial price established by the healthcare provider reflecting the value of the services being offered. It represents the amount billed to patients or payers prior to any negotiations with insurance companies or adjustments due to contractual agreements. In this context, other options provide different aspects of financial transactions related to healthcare. The final price after insurance negotiations reflects the outcome of interactions between the provider and payer, not the initial charge set by the provider. The average payment made by insurance companies is an average value of what insurers typically reimburse, not the charge itself. The total cost incurred by a patient encompasses all expenses, including any payments made after the charge and adjustments like copays, but it does not represent the initial charge established by the healthcare provider. Thus, understanding that "Charge" is the pre-adjustment figure is crucial to navigating healthcare billing accurately.