Glossary — payor contracting and price transparency terms
Plain-language definitions of the terms that matter most in payor contracting, price transparency regulation, and healthcare reimbursement strategy.
Healthcare contracting has a vocabulary that can obscure more than it reveals. These definitions are written for CFOs, Revenue Cycle Directors, and Practice Administrators — not billing specialists. The goal is clarity about what each term means, why it matters, and how it connects to the decisions you're making.
GLOSSARY
Payer-specific negotiated rate
The exact dollar amount a health insurer has contractually agreed to pay a specific provider for a specific healthcare service. Two practices offering identical services in the same market can receive rates that differ by 30 to 40 percent from the same insurer.
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GLOSSARY
Allowed amount
The maximum amount a health insurer will pay for a covered service — equal to the negotiated rate for in-network providers, or calculated by a different methodology for out-of-network claims.
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GLOSSARY
CPT code reimbursement rate
The dollar amount a health insurer pays a provider for a specific service identified by a Current Procedural Terminology (CPT) code, as defined in the provider's participation agreement. The fundamental unit of analysis in payor rate benchmarking.
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GLOSSARY
Chargemaster (CDM)
A healthcare provider's master price list — the "retail" price before any contractual adjustment applies. Chargemaster prices are typically set 200 to 400 percent above what any insurer actually pays.
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GLOSSARY
MPPR (Multiple Procedure Payment Reduction)
A reimbursement policy that reduces payment for secondary and subsequent procedures performed during the same patient encounter. Particularly significant for PT, OT, and surgical specialties that routinely bill multiple procedure codes per visit.
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GLOSSARY
In-network vs. out-of-network reimbursement strategy
The deliberate decision by a provider regarding whether to participate in a health insurer's network — and on what terms — based on an analysis of the reimbursement rates available and the patient volume implications of each approach.
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GLOSSARY
Payor contract renegotiation
The process by which a healthcare provider and a health insurer revisit and revise the terms of an existing participation agreement. The most consequential factor in outcome is preparation — specifically, understanding what rates are achievable based on what comparable practices are actually being paid.
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GLOSSARY
Rate benchmarking for medical practices
The process of comparing a medical practice's payor-contracted reimbursement rates against the rates received by comparable providers — same specialty, overlapping market — from the same insurers. The foundation of informed payor contract strategy.
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GLOSSARY
Machine-readable file (MRF)
A structured data file, published by health insurers under the Transparency in Coverage rule, that discloses negotiated rates with in-network providers. Can exceed tens of terabytes per insurer. The source of all payor rate benchmarking data.
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GLOSSARY
Transparency in Coverage rule
A federal regulation, effective July 1, 2022, that requires health insurers and self-funded group health plans to publicly disclose their negotiated rates with in-network providers through machine-readable files. The regulatory foundation for modern payor rate intelligence.
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