Copay vs Coinsurance
Definition
A copay is a fixed dollar amount the patient pays per visit or service (e.g., $30 per office visit). Coinsurance is a percentage of the allowed amount the patient pays after the deductible is met (e.g., 20% of a $500 procedure = $100). Both are patient responsibility payments coded under PR (Patient Responsibility) group codes on the remittance advice. PR-1, PR-2, and PR-3 are the CARC codes for deductible, coinsurance, and copay respectively.
Why They Matter for Billing
Patient responsibility collections are a critical revenue stream. If the practice does not collect copays at the time of service and coinsurance after the claim processes, the revenue is at risk. Practices that collect copays at check-in recover 90%+ of patient responsibility. Those that bill after the visit recover 50-60%. Understanding PR codes on the remittance tells the billing team exactly what to collect from the patient.
How They Work
Copay: Patient pays a set amount at check-in regardless of the service provided. The payer pays the remaining allowed amount. Coinsurance: After the patient meets their annual deductible, they pay a percentage of each service. Example: 80/20 plan means the payer pays 80% and the patient pays 20%. Once the patient reaches their out-of-pocket maximum, the payer covers 100%.
Related Terms
Deductible — the amount the patient pays before coinsurance kicks in. Out-of-pocket maximum — the annual cap on patient spending. Explanation of benefits — shows the copay/coinsurance breakdown. Fee schedule — the allowed amount that copay/coinsurance is calculated against.
Common Questions
Does the copay count toward the deductible?
It depends on the plan. Some plans count copays toward the annual out-of-pocket maximum but not toward the deductible. Other plans count copays toward both. Check the patient's benefit summary for their specific plan rules.
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This glossary is for informational purposes. Consult official billing guidelines and payer policies for definitive definitions. Last updated: 2026-04-06.