Clip this guide to payer definitions
Here's a quick guide to what those various payer initials and terms mean:
4 Allowable charge: This is the maximum fee that a payer will use as a basis for reimbursement.
4 Appeals process: This occurs when a provider or consumer requests a review of a payer's denial of coverage and contests the payer's decision on a specific claim.
4 Authorization: This is certification that benefits may be used.
4 Case management: This is a process in which plan members with specific health care needs are identified, and a treatment plan is developed, implemented, and monitored by a health care professional.
4 Coinsurance: This is the part of covered health care costs that must be paid by the health plan member.
4 Eligible person: This is a health plan member who meets the plan's requirements.
4 Health maintenance organization (HMO): This type of payer provides or arranges for coverage of certain health services needed by plan members for a fixed, prepaid premium. The four types of HMOs are group, individual practice association, network, and staff model.
4 Health service agreement: This is a detailed benefit description given to enrolled employers.
4 Mandated benefits: These are benefits that insurers are required by state or federal laws to offer members.
4 Pre-admission authorization: Review criteria are used prior to a patient's admission to determine the appropriateness of the level of care requested.
4 Preferred provider organization (PPO): Contracts are established with providers of medical care to provide health services to a population of plan members, usually at a discounted rate.
4 Prior authorization: This is a process of obtaining coverage approval for a services.
4 Third-party administrator (TPA): This is an independent person or organization that administers health benefits and claims for a self-insured company or group.
4 Third-party payer (TPP): This is an organization that pays for or underwrites coverage of health care expenses for another company such as an employer.
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