The allowed amount is the maximum a plan will pay for a covered service — the contracted rate for in-network care, or the plan's out-of-network allowance otherwise. The difference between the billed charge and the allowed amount is a contractual adjustment (CO-45), not a denial you overturn by demanding the full charge.
How the allowed amount is set
- In-network: the rate in your contract with the payer (often a percentage of a fee schedule).
- Medicare: the Medicare Physician Fee Schedule amount for the code, locality, and setting.
- Out-of-network: the plan's own allowance — a percentage of Medicare, a UCR figure, or another methodology the plan defines.
Why CO-45 usually isn't appealable
When the plan pays its allowed amount, the remainder shows as CO-45 (charge exceeds the allowed amount) — a contractual adjustment. Demanding the full billed charge isn't an appeal that wins. What is disputable: an in-network payment that doesn't match your contracted rate, or an out-of-network allowance whose methodology the plan won't justify. Those are real arguments; the gross charge is not.
Dispute the rate, not the charge
Frequently asked
Can I appeal the allowed amount?
Is the allowed amount the same as what I'm paid?
Primary sources: CMS — Medicare Physician Fee Schedule. General information, not legal or medical advice — confirm against the governing rule for the plan type.
When the appeal has to be written, and cited
Upload the denied EOB and Merits returns a complete, citation-verified appeal letter — the clinical argument, the payer's own coverage criteria, and your federal appeal rights — in about a minute.