Every insurance, including medicaid, has a specific pricing formulary which includes the contracted amounts they will pay for certain services, regardless of the amount billed. And that contracted amount is almost always less than the billed amount.

So... in Steve's case, the amount billed was 1069, the contracted amount was 538.23 which was paid IN FULL, leaving you with a zero balance due. Effectively, the billing agency "eats" the difference because they agreed to accept the contracted amount as payment in full.

Does that make sense???