A guarantee of the faithful performance of a construction contract and the payment of all material and labour bills incidental thereto. A bond covering payment of labour and materials only is a Payment Bond and a bond covering faithful performance only is known as a Performance Bond. Refer “Guarantee, Performance Bond.”
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Sometimes also called a labor and materials bond, this bond guarantees that bills owed by the contractor will be paid as they come due. The agreement may be incorporated into the performance bond.
Insurance Encyclopedia
Payment bond (Surety)
A bond guaranteeing that a contractor will provide and pay for the labor and materials used on a project. This is done to save the property owner from being liable for the contractor’s failure to payment.
payment error prevention program (PEPP)
Program to assist in the reduction of Medicare prospective payment system (PPS) inpatient hospital reimbursement mistakes.
Payment floor
Minimum number of days that must pass before a Medicare administrative contractor can pay an insurance claim. Payment for manual claims is within 4 to 12 weeks and as little as 7 days when transmitted electronically. Prompt payment guidelines for clean claims transmitted by participating providers may be paid faster than for those submitted by nonparticipating providers.
Payment in full
Under Medicare guidelines, the amount that the provider must accept because of a contract or amount the provider voluntarily accepts as reimbursement in full from the insurer, meaning the patient’s obligation has been met.
Payment locality
One of the many geographical pricing areas used by Medicare administrative contractors (MACs) to calculate physicians’ customary and prevailing charges for payment. Localities are the basis for fee schedule payment areas and geographic adjustment factor (GAF) adjustments under the Medicare fee schedule (MFS).
Payment mode
System wherein the insured pays insurance premiums either monthly, quarterly, semiannually, or annually.
Payment Order
An authority given by an insured to a broker to empower the broker to collect a claim on the insured’s behalf.
Payment protection insurance (PPI)
Gives protection for repayments on a personal loan, mortgage, credit card or other regular commitments. See CREDIT PROTECTION INSURANCE.
Payment rate
1. Dollar amount to be paid to a provider for medical services given to a member of a managed care plan. 2. Total payment that a hospital or community mental health center gets when it provides outpatient services to Medicare patients. Also see average payment rate (APR).