Practice managers and physicians encounter endless terms, acronyms, and organization names through their lengthy education and training, even before they begin practicing in the real world. The amount of information they must keep in their heads expands exponentially once they begin interacting with payors and insurance companies that will fund the majority of their practice.
PayrHealth, as a key bridge between practices and payors, makes it our goal to create complementary relationships built on trust and mutual awareness. Use this glossary as a guide to the numerous terms and entities that have a role to play in the healthcare industry so you’re always an informed player in these key relationships.
What is a Payor?
The term “payor” is obviously critical to being able to communicate and understand conversations in the contracting space. However, many people can be thought of as “payors,” from government programs to individual patients. When we talk about payors we typically mean private insurance companies, government programs, and employers. Third-party firms you may have contracts with may also be considered payors.
Regardless of where your revenue is coming from, it pays to invest in contracting services from experts in the industry. We know what various types of plans, companies, and third-party payors should and shouldn’t be negotiating for and can help you manage the hassle when making new contracts or re-negotiating old ones. To learn more about what you should expect from your payor contracts, call or contact our team online today.
Payor Contracting Key Terms
Some of the payor terms may be familiar to you already, but it’s always good to know what your options or avenues for reimbursement are. In addition, we provide key definitions of terms that might be used in your contracts so you’re familiar with what they mean for your practice’s revenue.
Types of Payors
- Government Programs (Fee-For-Service) – Medicare, Medicaid, the VA, and other government organizations typically have pre-set terms that aren’t able to be negotiated with. However, these often provide a significant amount of revenue to practices and are key payors for many individuals with a wide range of health care needs.
- Health Maintenance Organization (HMO) – HMOs have a reduced payment plan but offer a unique opportunity to reach new patient lives, as people covered under HMOs primarily seek care from in-network practices.
- Preferred Provider Organization (PPO) – PPOs can offer greater flexibility for contract terms with individual providers or locations to incentivize people to choose their network over others.
- ERISA Employee Benefit Plan – Employer-sponsored health plans are unique in that they’re a payor that doesn’t have specific payor goals from networking with practices. Instead, they want an affordable option for their business that often has a tax advantage over partnering with an HMO or PPO.
There are still more types of payors defined by their contributors and legal status, but the principles are the same for contracting with nearly all of them. The more data you have on your market and potential patients, the better leverage you have at the negotiation table. PayrHealth provides this data with decades of experience in all 50 states.
Payment Structures and Terms
- Fee-for-service: Contract terms that dictate specific, flat-rate reimbursement rates for services you provide.
- Direct to Employer: Specific contracts made directly with ERISA plans and practices.
- Value-based reimbursement: Emerging models of value-based payment plans vary by plan. Value-based care emphasizes services that provide the most notable care regardless of cost or reimbursement rate.
- Full or partial capitated payments: Essentially a “healthcare-as-a-service” approach where payors reimburse on a per-member per-month basis, regardless of utilization or costs.
Understanding these payment structures and other options for gaining reimbursement that helps your practice stay financially healthy is key to being able to negotiate competitive contracts. With the guidance from the experts at PayrHealth, we’ll help you understand your options for payment plans and contract terms.
Payor Contracting and Management with PayrHealth
Our team of dedicated experts can take the guesswork out of your new or outdated payor contracts. Call us or contact us online today to find out how you can save revenue and eliminate the need to handle these complicated tasks in-house.