In the context of patient billing, what does the term "coinsurance" refer to?

Coinsurance is an important concept in patient billing, referring to a cost-sharing arrangement between the insured individual and their health insurance provider. This term specifically describes the percentage of the healthcare costs that a patient is responsible for after meeting their deductible. For instance, if a patient has a coinsurance rate of 20%, they will pay 20% of the covered medical expenses, while the insurance company will cover the remaining 80%.

Understanding this concept is fundamental for both patients and providers, as it directly affects the out-of-pocket costs incurred during treatment. Coinsurance typically applies to various medical services and can vary depending on the patient's insurance plan and the specific service rendered. It's distinct from other forms of payment such as copayments, which are fixed amounts paid at the time of service.

This distinction is crucial in patient billing as it informs patients of their financial responsibility and aids in proper billing and collections processes within medical practices.