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Payer : Who Is It and Who Has the Money? Part 1
Medical professionals collect reimbursement payments from a variety of sources. Known as payers, they encompass commercial insurance companies, third-party administrators and government-funded programs.
In part 1 of this revealing article, Nitin Chhoda identifies the major commercial payers and third-party administrators, and what clinicians need to know to obtain reimbursements.
To ensure that services are paid for, practitioners must verify the client’s coverage each time they visit the office and ascertain any limitations as it will have a direct bearing on treatment options.
When contracting with a payer, it’s important for clinicians to know if the insurance company is the entity that actually sets the amount that medical professionals are reimbursed. Some participate in a payer network that determines how much practitioners are reimbursed for their services. Some networks pay better than others and clinicians should exercise due diligence in researching payers.
The most common form of insurance practitioners will encounter is the commercial policy, typically offered through the patient’s or spouse’s employer. This type of coverage will fall under one of the following:
• PPO – A preferred provider network is a group of healthcare professionals and facilities that have agreed to provide services at reduced rates.
• HMO – Health maintenance organizations rely on a network of healthcare providers, but clients are assigned a primary care physician and care must be accessed through that physician.
• POS – Point of service coverage is a hybrid blend of a PPO and HMO payer. Patients who visit an HMO medical provider are covered under HMO benefits. If they see a PPO provider, they receive coverage through the PPO.
• EPO – An exclusive payer or provider organization plan requires patients to select a primary care physician and obtain a referral before seeing a specialist.
• High deductible plans – These offer patients low monthly premiums and deductibles that can begin at $4,000 or more.
• Discount plans – These plans require patients to pay a monthly fee to obtain access to participating providers. They’re not true healthcare insurance plans.
• COBRA – Coverage under a Consolidated Omnibus Budget Reconciliation Act plan is a payer that is dependent upon patients making their monthly payments on time. If a payment is late, claims will be rejected or the coverage cancelled.
A COBRA plan is interim coverage when an employee loses or leaves their job.
A third party administrator (TPA) or payer is the middleman of healthcare. TPAs are operated as an independent network, or price claims by accessing other networks.
Reimbursement problems can arise for clinicians if the TPA prices the claim incorrectly or the claim isn’t paid according to the individual TPA agreement.
Before contracting with a payer, it’s essential for practitioners to determine which entity sets the cost of services and what those payments will be to the practice.
Different networks and commercial insurers for medical billing have their own set of rates and reimbursement requirements that must be met for clinicians to be paid and practitioners must conduct sufficient research to ensure they’ll be reimbursed appropriately.