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What is Provider Reimbursement?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 21 August 2016
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    2003-2016
    Conjecture Corporation
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Provider reimbursement is a term used to describe payments for services rendered that are remitted by insurance companies to qualified providers such as doctors or hospitals. The exact terms of reimbursement will depend on the provisions governing the filing of claims and the evaluation of the services rendered to the patient. In addition, the subsequent approval of those claims and the amount of the provider reimbursement issued for each presented claim will depend on the terms and conditions of the insurance coverage extended to the patient. This is true for private insurance plans as well as government operated medical and health benefits.

Typically, provider reimbursement takes place when an approved healthcare physician or facility extends medical care to an insured party. Instead of requiring that the patient pay up front for the services performed, the healthcare professional files a claim on that patient’s insurance plan. Assuming that the procedures are covered under the terms of the healthcare coverage, the filer is reimbursed directly by the insurance company. This is in contrast to situations in which the patient must make payment arrangements with the caregiver, then file the insurance claim directly with the insurer in order to recoup all or at least part of the medical charges.

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The terms of provider reimbursement will vary, depending on the relationship with the care provider involved and the type of healthcare coverage that is carried by the patient. In some instances, the provider may have contracted with the insurance company to provide specific types of care for specified rates that are a discount off his or her regular rates. The terms of the coverage may require the patient to pay a deductible or a co-pay on the front end, while the provider agrees to file a claim for the remaining balance due on the patient’s account. The insurance provider will review the merits of the claim, compare the claim contents to the terms and conditions of the insurance contract, and issue payment to the healthcare provider accordingly.

One of the benefits of provider reimbursement is that patients do not have to deal with filing paperwork directly with the insurance carrier. Instead, this is often handled by the accounting team of the healthcare provider. When a severe illness is involved, this means that the patient and his or her loved ones can focus on the treatment and recovery process rather than being concerned about paying for the services up front and then finding time to file claims and deal with the insurance carrier directly. For the provider, this arrangement of provider reimbursement normally means that payment for services rendered is received in a timely manner, with little or no need to attempt to collect any sum from the patient in recovery.

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