Imagine you’re a doctor and you have a patient that comes in for a service such as a check up. Once their check up is completed, the healthcare professional needs to be paid for their efforts. It’s not as simple as paying for a haircut or covering the bill at a restaurant.
Medical billing can be quite a rocky process. On top of that, healthcare costs are quite expensive. This is why a lot of people have insurance.
A common term in regard to medical billing is a third party payer. Just how insurance looks like a lot of different things, a third party payer can look like a lot of different things.
The most common viewing of a third-party payer in the United States are private insurance companies, like Blue Cross and Blue Shield, and public government payers, such as Medicare and Medicaid.
Let’s brush up on a few definitions.
What is Medicare? Medicare is federal health insurance available to those who are 65 years of age or older. It’s also available to those under the age of 65 with certain disabilities or other medical diagnoses or conditions.
What is Medicaid? Medicaid is another federal organization that provides health coverage to people with low income or a lack of access to resources. This includes low-income adults, pregnant women, elderly adults, and people with disabilities. Medicaid packages vary from state to state. It’s a joint payment from the federal government and the dependent state.
The number of people enrolled in Medicare as of March of 2023 is 65,748,279 people.
A third-party payer is any organization besides the patient that pays for healthcare services. They hold the responsibility of paying for the service provided on behalf of the patient.
Essentially third-party payers reimburse healthcare organizations. They are a major source of revenues for most providers. Working alongside insurance on behalf of your patients is said to be one of the most core and basic tenets of the business of healthcare.
You must incorporate time and effort in order to understand how it works. If you’re watching this, that shows that you’re off to a great start! Not all expectations from third-party payers are the same.
You have to understand their policies and procedures in order to avoid any obstacles that could potentially stand in the way of your reimbursements.
Besides private and public insures such as insurance companies and government programs, there are a few other organizations that fall under the classification of a third-party provider.
Where’s what it can look like: workers compensation, managed care organizations, and veterans affairs. It can also be an employer that is under a self-insured plan. Self-insured health plans are most popular with large employers, labor unions, school districts, and other municipalities.
Regardless of what the organization looks like, the main goal of the third-party payer is to do just that. Pay. But This is not all they do. Not even close.
Third-party payers manage practically all the financial aspects of healthcare. This includes processing claims, facilitating financial transactions, and negotiating with healthcare providers to determine reimbursement rates and contracts for services.
They also set forth the guidelines for coverage in relation to services as well as medications. So in summary, third-party payers do just about everything under the sun. A third-party payer is different from a clearinghouse.
A clearinghouse validates the format of claims according to industry standards, checks for errors, and then sends the claims to the appropriate third-party payer.
All good information to know! It’s important to be aware of the different types of payers and how they operate their payment plans.
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