What Does Contractual Adjustment Mean in Billing?


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Contractual adjustment is a phrase commonly used in health insurance when an insured person is covered by an individual or group health plan that involves a network of providers contracted by the insurer. Contractual adjustments generally reduce the amount of the service charge, thus reducing the amount owed on the claim. Insurance NetworksInsurance networks such as the health maintenance organization and preferred provider organization plans have become increasingly common in the early 21st century. Many people are covered by group plans that are part of these insurance networks. The network consists of three parties in the insurance process -- the insurer, the insured and the provid

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