Define copayment in the context of insurance billing.

A copayment, often referred to as a copay, is a specific term used in insurance billing that refers to a fixed amount that a patient is required to pay for covered services at the time the service is rendered. This predictable out-of-pocket cost is established by the insurance plan and is intended to share the cost of medical services between the patient and the insurer. For example, a health insurance policy might stipulate a $20 copayment for a doctor's visit, meaning that regardless of the total cost of the visit, the patient is responsible for paying $20 at the time of the appointment.

This structure incentivizes patients to seek necessary medical care while also managing healthcare costs effectively for insurance providers. In contrast to variable amounts based on the service provided or a total billed amount, copayments are designed to be straightforward and consistent, allowing patients to know upfront how much they will need to pay when accessing care.