Deductible
A deductible is the amount a patient must pay out of pocket for covered services each plan year before insurance begins sharing costs. Deductible amounts apply at the allowed amount, post to remittances as PR-1, and reset annually — which is why January and February are the hardest collection months.
- Type
- Fixed annual amount before plan pays
- ERA code
- PR-1 (patient responsibility: deductible)
- Resets
- Each plan year (often January 1)
- Applied at
- The allowed amount, not billed charges
How does a deductible work?
Until the patient has paid their deductible for the plan year, the plan pays nothing toward most covered services — but the claim still matters enormously. It prices the service at the contracted allowed amount, credits the patient's deductible accumulator, and transfers responsibility to the patient as PR-1 on the remittance. After the deductible is met, coinsurance takes over; copays generally run outside the deductible altogether.
What does a claim look like during deductible season?
February visit, patient on a $2,000-deductible plan with $1,940 still remaining. You bill $180; the payer allows $92.40.
- Payer payment: $0.00
- PR-1 (deductible): $92.40 — patient owes this to you
- CO-45 contractual adjustment: 180.00 − 92.40 = $87.60 — written off as always
- Patient's remaining deductible drops to 1,940 − 92.40 = $1,847.60
Note what did not happen: the patient does not owe $180. The contract discount survives the deductible. Also note the accumulator lag — if the patient saw two other providers this week, the "remaining deductible" you verified this morning may already be stale by adjudication time.
How does a deductible differ from a copay and coinsurance?
Sequence and shape. The deductible comes first and is 100% patient-paid. Coinsurance comes after, as a percentage split. A copay is a flat per-service fee that typically neither waits for nor credits the deductible. All three usually accumulate toward the annual out-of-pocket maximum, after which the plan pays 100% in-network. For an HDHP paired with an HSA, IRS rules set minimum deductibles annually — those plans are why deductible balances have become the largest patient-pay category most practices manage.
How do you collect deductible balances without losing patients?
- Verify remaining deductible on the eligibility response before the visit and flag high-remaining patients for a front-desk conversation.
- Collect an estimate or deposit at check-in based on the contracted allowed amount for the scheduled service — never the billed charge.
- Take a card on file with a signed authorization and a cap ("we will charge up to the adjudicated amount, not to exceed a stated maximum").
- Bill promptly off the ERA. A statement sent 5 days after the EOB arrives collects far better than one sent 45 days later, when the patient no longer remembers the visit.
Frequently asked questions
The allowed amount. In-network claims still price at the contracted rate during the deductible; the payer pays $0 and the full allowed amount transfers to the patient as PR-1. The difference between billed and allowed is still written off. Billing patients your full charge during deductible is a contract violation.
Check the ERA for PR-1. A zero-pay claim with the allowed amount in PR-1 is not a denial — it is a properly adjudicated claim applied to the deductible. The claim did its job: it priced the service, credited the patient's deductible, and moved responsibility. Bill the patient, not the payer.
No. ACA preventive services bypass cost sharing entirely, copay-based services often bypass the deductible, and some plans exempt primary care or generics. Conversely, out-of-network services usually accrue to a separate, larger deductible. The eligibility response shows remaining amounts for both.
The secondary plan may pick up what the primary applied to deductible, subject to its own rules and its own deductible. Getting coordination of benefits right matters most in deductible season, because that is when secondary coverage has the most to pay.
Sources & further reading
Reviewed by the ImmediCare Solutions RCM team
Certified billers and coders handling claims across 50+ specialties nationwide. This entry is reviewed against current payer policy and CMS rules. Last review: Jul 5, 2026.
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