How care gets paid for in the United States.
An interactive field guide for people building software in US healthcare. Follow one member through a plan year, sit in each seat at the table, and find where your product attaches. Terms with a dotted underline open a definition.
The provider submits the claim for review.
Information and money leave by different doors. The member’s explanation of benefits arrives separately.
Maya Okonkwo is 34, a product designer at a 400-person software company. Her plan has a $2,000 deductible, 20% coinsurance after it and a $5,000 out-of-pocket maximum. Behavioral health has a separate administrator. The employer funds the claims; the insurer on the card runs the plan for a fee.
Each field is read by a different party and unlocks a different record. Select one to see who reads it and what it opens.
For buildersEach field points at a system of record elsewhere: eligibility, the employer contract, the network, the PBM, the claims address. Treat the card as a set of foreign keys.
Self-funded plans cover 67% of workers with employer coverage, usually run by a national administrator under an administrative services agreement. The card carries the administrator’s brand in both arrangements. Pharmacy routing follows the NCPDP card standard; medical claims follow the payer ID.
The premium keeps coverage in force and is paid whether or not care is used. Everything else on this page happens when care is used, in this order: the provider bills a charge, the plan recognizes an allowed amount, and the allowed amount is split between Maya and the plan by her deductible, her coinsurance and her out-of-pocket maximum.
For buildersIn Maya’s plan these seven values, and the running totals behind the deductible and the maximum, decide a single in-network claim. Real plans add copays, tiers, out-of-network rules and exclusions, but each estimate, EOB and remittance still applies rules like these to an allowed amount.
Builder’s detailThe eligibility response (X12 271) carries the deductible and out-of-pocket amounts remaining; the remittance (835) carries the split with adjustment reason codes; the EOB restates it for the member.
Billed charge for this claim: $3,000. The $2,000 difference is written off by the provider; see the bill. Assumes covered, in-network care with no copay and the out-of-pocket maximum unreached.
Maya sees a therapist by video every month from January. In March her doctor orders an MRI, which she has at a hospital outpatient department. In September she goes to an emergency department after a fall.
Cost sharing accumulates. Allowed amounts count toward the deductible until it is met, then coinsurance applies, until the out-of-pocket maximum stops the member’s spending. What a service costs the member depends on everything billed before it in the plan year.
Move the deductible, or move the MRI to another month, and the year reflows. Premium contributions sit outside these limits.
For buildersA patient cost estimate needs the accumulators as of today, which come from the eligibility response. A claim that adjudicates tomorrow changes them.
Builder’s detailThe 271 response reports “deductible remaining” and “out-of-pocket remaining” as of the inquiry; plans refresh these as claims adjudicate, so an estimate given before a pending claim posts can be wrong by that claim.
Covered, in-network care; no copays; no other coverage; one member. Video therapy is allowed at $120 against a $180 charge, the MRI at $1,000 (facility $750, radiologist $250) against $3,000 billed, and the emergency visit at $2,600 (facility $2,200, physician $400) against $7,150 billed. The amounts are synthetic teaching values. One model computes every number on this page.
Three encounters, one path: eligibility, authorization, care, claim, adjudication and payment. Switch the encounter to see what changes at each station and what stays the same. Real workflows branch, repeat and run in parallel; the stations are the responsibilities.
For buildersEach station is a system boundary with its own transaction, its own failure modes and its own buyer. Turn on Builder’s detail to see the transaction at each one.
A submission can fail format, identification or other intake checks. The sender may need to correct it before processing can continue.
A claim decision can deny some or all benefits. The reason and applicable plan procedures determine what happens next.
Fixing claim information and challenging a benefit decision are different actions. Follow the plan’s instructions and deadlines.
A provider bills its full charge. The administrator prices the claim at the contracted amount, which is usually far lower, and the provider writes off the difference as a contractual adjustment. The allowed amount is then split between the member and the plan under the benefits in force that day.
The write-off is the number newcomers miss. It explains why a hospital’s list prices say little about what any party pays.
For buildersStore all five values on every claim line: billed, allowed, member, plan, write-off. An unqualified “amount” field is the most common data-model mistake in healthcare software.
Builder’s detailOn the 835 remittance the write-off appears as a contractual obligation adjustment (group code CO) with a reason code, and the member’s share as patient responsibility (group code PR). The billed amount is on the 837; the allowed amount is implied by payment plus adjustments.
The explanation of benefits shows the billed amount, the allowed amount, what the plan paid and what the member owes; the remittance to the provider carries the adjustment reasons. Hospitals must now publish their negotiated rates alongside their list charges, which shows the gap directly.
The member, with the employer behind them. The providers, in three shapes: a practice, a hospital and a therapist on a video call. The payer, often several companies under one brand. Between each pair sits a contract; information flows one way along it and money the other.
Select a seat to see what it sends and receives. Three seats make five chapters: one for the member and employer, three for the provider shapes, one for the payer. Each answers the same six questions.
For buildersChoose the seat first. A product that serves two seats serves two customers with opposed incentives, and its data model carries both views of the same claim.
Maya picked a plan at open enrollment and pays part of the premium from each paycheck. Her employer pays the rest and, because the plan is self-funded, pays the claims from its own money. The insurer on the card is its administrator, and stop-loss insurance covers the largest claims.
For buildersThe employer is a buyer with a budget, a broker and a plan year that often begins January 1. Most products reach members through the employer or its administrator.
Maya: care she can reach, a predictable bill, a network with her doctors. The employer: a benefit that recruits and retains people at a cost it can forecast.
Payroll contributions plus the employer’s share fund expected claims and administration. In 2025 the average worker paid $1,440 of a $9,325 single premium. Cost sharing comes on top when care is used.
For Maya: a surprise bill, a denied authorization, a therapist outside the network. For the employer: cost trend above budget, a few catastrophic claims, vendor contracts it cannot see inside.
The summary of benefits and coverage, the plan description, the card and the EOB. Behind them, the benefits platform, the enrollment file (X12 834) to each vendor, and the administrator’s portal.
“Plan” is the benefit arrangement. “Group” is the employer’s covered population. “Premium” keeps coverage in force and sits outside the deductible.
Benefits administration and enrollment, decision support at open enrollment, cost estimates, navigation to in-network care, and claims analytics for self-funded employers.
Maya’s doctor belongs to a group practice. The practice is credentialed with each payer it accepts and signs a contract with a fee schedule, often set as a percentage of Medicare rates. Each visit becomes diagnosis and procedure codes, then a professional claim, then a payment and a patient balance.
For buildersSelling to a practice means selling time back to the clinician or cash back to the office. Measure days in A/R, first-pass acceptance and denial rate before and after.
Clean claims that pay the first time, authorizations that keep pace with care, patient balances that get collected, and time with patients.
A fee per coded service at the contracted rate, plus the member’s cost sharing. Value-based contracts add shared savings or a payment per member.
Denials, prior authorization, days in accounts receivable, and credentialing that keeps a new clinician from billing for months. Marketplace insurers denied about 19% of in-network claims in 2024.
The EHR for the record, the practice management system for scheduling and billing, a clearinghouse, and often a billing service or revenue cycle vendor.
“Provider” can be the clinician who rendered the service, the group that bills, or the entity that is paid. A claim carries all three, and they can be three different NPIs.
Eligibility before the visit, prior authorization, coding assistance, claim scrubbing, denial management, patient estimates and payments, value-based reporting.
Maya’s MRI and her emergency visit each produced a facility claim from the hospital and a professional claim from the clinician. The hospital bills from its chargemaster, a list of charges for everything it does, and is paid according to contracts. For inpatient stays, Medicare and many commercial contracts pay a fixed amount per diagnosis-related group.
For buildersSelling to a hospital means selling against denials and days in A/R, to a buyer in revenue cycle or finance. The clinical pitch gets a meeting; the cash pitch gets a contract.
Authorized admissions and procedures paid at contracted rates, a short stay for each diagnosis group, and collection of patient balances without losing patients.
Facility payment by case rate, per diem, percentage of charges or fee schedule, plus patient cost sharing and government programs. Uncompensated care becomes charity care or bad debt.
Medical-necessity denials, inpatient-versus-observation disputes, downgraded level of care, and the cost of a revenue cycle department large enough to contest all of them.
The institutional claim (UB-04 or X12 837I) with revenue codes, the chargemaster, the hospital EHR, utilization review and case management, and a revenue cycle platform across several vendors.
“Charge” is the list price and “rate” the contracted amount. A “facility fee” covers the room, equipment and staff, billed apart from the physician. “Observation” is an outpatient status that looks like an admission.
Prior authorization and utilization review, coding and documentation, denial prevention and appeals, price transparency files and estimates, patient financing, remittance reconciliation.
Maya’s plan carves behavioral health out to an administrator with its own network, authorization rules and payer ID. Her therapist, licensed in her state and seeing her by video, checks eligibility and submits claims there. Many therapists stay outside networks; their patients pay directly and submit a superbill. Prescribing ADHD medication by telehealth has its own federal rules.
For buildersThe thinnest margin in the system sits here. The largest recent behavioral healthtech companies are intermediaries between clinicians and payers, or sell the benefit to employers.
To see patients and be paid a rate that supports a practice. Many solo clinicians skip insurance because credentialing, authorizations and low rates cost more than they return.
In network: the behavioral administrator pays the contracted rate for a timed psychotherapy code, plus cost sharing. Out of network: the patient pays the clinician and the plan may reimburse part.
Low network rates, parity that is promised on paper and hard to enforce, licensure for patients who move or travel, and prescribing rules that change year to year.
A small EHR or practice platform, a telehealth tool, the administrator’s portal, and increasingly an intermediary that credentials the clinician and bills for them.
“Carve-out” means the benefit is administered elsewhere. “Place of service” says where the patient was (code 10 for home). “Parity” is a legal standard for the rules, with rates left to contracts.
Credentialing and billing intermediaries, telehealth with claims built in, employer-purchased behavioral programs, measurement-based care, licensure and prescribing compliance.
The insurer on Maya’s card runs several businesses under one brand. For Maya’s employer it administers claims for a fee. For a fully insured small employer it keeps premium and carries risk. For Medicare Advantage it is paid a risk-adjusted amount per member by CMS, and for managed Medicaid a capitation rate by a state. Each line has its own regulator, measures and often its own claims system.
For buildersName the line of business first. A capability for Medicare Advantage lives under different rules, data and incentives than the same capability for a self-funded employer account.
Premium or fees that cover claims plus administration, a medical loss ratio within the legal bounds, a network broad enough to sell and narrow enough to price, and quality scores that earn bonuses.
In: premium, administrative fees, capitation from CMS and states. Out: claims (the large majority), care management, the PBM, network contracting, member service and margin.
Cost trend it missed in pricing, risk scores it cannot defend, Star ratings that slip, and prior authorization under scrutiny: Medicare Advantage insurers made 52.8 million determinations in 2024, denied 7.7%, and lost 80.7% of the few appeals.
The policy or administrative services agreement, provider contracts, benefit configuration, the claims engine, utilization management, the member portal, regulatory filings.
“Payer” covers any plan or claims counterparty; ask who bears risk, who adjudicates and who pays. “Plan” can be the company, the product or the employer’s arrangement. “Network” is a contract set.
Claims adjudication and payment integrity, prior authorization and the new API obligations, provider data, risk adjustment and quality analytics, care management, member engagement, data exchange.
| Line of business | How it is paid | Role | Regulator |
|---|---|---|---|
| Commercial, fully insured | Premium from the employer or individual | Keeps premium, bears claims risk, bound by the loss ratio | State insurance departments; CMS for ACA rules |
| Commercial, self-funded | Administrative fee per member from the employer | Administers; the employer bears risk | DOL under ERISA |
| Medicare Advantage | Risk-adjusted payment per member from CMS | Bears risk; earns Star rating bonuses | CMS |
| Medicaid managed care | Capitation per member from the state | Bears risk under the state contract | The state Medicaid agency; CMS |
| Marketplace individual | Premium plus federal subsidies | Keeps premium, bears risk, bound by the loss ratio | CMS and state Marketplaces |
Each party responds to how it is paid and what it is held accountable for. The behavior follows from the contracts.
For buildersA product that asks a party to act against its payment model is adopted slowly. A product that sits with the party whose incentive already points the right way, or that changes the payment model, has a chance.
Two thirds of covered workers are in self-funded plans. The employer keeps the premium margin an insurer would take, follows federal rules under ERISA in place of state benefit mandates, and sees its own claims data. Stop-loss insurance bounds the risk.
An insurer that keeps the difference between premium and claims has a direct interest in avoiding care it judges unnecessary. The loss-ratio rules cap what it can keep, and prior authorization metrics are now public, which keeps the practice under scrutiny.
List prices anchor negotiations, apply to uninsured and out-of-network claims and feed cost reports. Price transparency rules now require hospitals to publish negotiated rates beside the list.
A larger group has leverage in contracting, can afford a revenue cycle team and can take on value-based contracts. Many practices now belong to hospitals, insurers or investors, which changes who sits across the table.
A PBM negotiates rebates from manufacturers against list price and keeps or passes through a share. High list prices produce large rebates, a structure the FTC examined in 2024.
When the contracted rate for a timed therapy session falls below the clinician’s cost, the clinician goes out of network or cash-only. Parity law governs the rules; rates stay in the contracts.
The route someone’s coverage takes decides the rules that apply, who pays and which products can reach them. Employer coverage is the largest route, then Medicare, Medicaid and individual policies. A person can hold more than one, so the shares add to more than 100%.
For buildersThe same feature has a different buyer and regulator on each route. Choose the routes before the data model.
Share of the US population with each coverage type for some or all of 2025. Census Bureau, September 2026. Categories overlap. In 2026, 55% of eligible Medicare beneficiaries are in Medicare Advantage plans run by private insurers, 78% of Medicaid enrollees receive care through managed care organizations, and 23.1 million people selected Marketplace coverage. Private insurers therefore operate inside the public programs too.
Each layer solved a problem of its time and left a structure the next layer had to work around. These are the ones a builder still meets.
For buildersWhen a rule seems arbitrary, find its layer. Most of the system’s odd shapes come from a 1940s tax rule, a 1974 pension law or a 1996 privacy law meeting a 2024 API mandate.
Contributions from employers, members, CMS and the states enter a pool. Claim payments to providers leave it. For insured products, at least 80 cents of each premium dollar (85 in the large-group market) must go to care and quality improvement, or the difference is rebated. The remainder covers administration and margin.
In Maya’s self-funded plan the pool is the employer’s money, the administrator is paid a fee, and stop-loss insurance sits above it as a separate contract. The employer’s fiduciary duty under ERISA replaces the loss-ratio rule.
For buildersEvery party’s behavior on the other pages comes from its position in this loop. Find where your product moves, saves or delays money in it, and you have found who will pay for it.
CMS ↗ eCFR ↗ KFF ↗ U.S. Department of Labor ↗ U.S. Department of Labor ↗
One brand can hold several seats. Licensing, ownership, business portfolio and service contracts connect organizations in different ways, and each kind of connection carries a different meaning.
For buildersFor a contract or an integration, identify the legal entity, the product and the line of business. The logo identifies the brand.
Aetna provides health benefits, CVS Caremark is the pharmacy benefit manager, and CVS owns pharmacies and clinics. One group holds the payer, the PBM and part of the provider seat.
The largest Medicaid insurer, with 12.5 million Medicaid members in 30 states at the end of 2025, paid by states per member. It bought Magellan Health, a behavioral company, in 2022 and agreed to divest the remainder in December 2025. Portfolios change, so every relationship here carries a date.
An integrated system in which the health plan, the hospitals and the medical groups are parts of one organization. The payer and the provider share a seat, which changes every incentive on the other pages.
Independent Blue companies cooperate when a member receives care outside the Home Plan’s area. The Home Plan issues the policy; the Host Plan is local to the care. In the BCBS Kansas example, the provider submits locally, local pricing applies and the Home Plan decides benefits. Coverage follows the member’s product and the card’s instructions.
Selected relationships from public filings and company websites. Business brands and regulated entities are labeled separately, and dates appear with their sources.
From enrollment to reconciliation there are nine seams where one party hands something to another. Each has a buyer, a measure the buyer watches, a data standard and a rule. Most healthcare software lives at one of them.
For buildersPick a seam. Learn its standard, its rule and the number its buyer reports upward. Then decide whether you improve that number or replace the party on one side of it.
Each seat has a person who signs, a person who blocks and a calendar that decides when the signature can happen.
For buildersSell to the calendar. A product that reaches members through employers has one buying window a year, and the broker is usually in the room.
| Seat | Who signs, who blocks | When |
|---|---|---|
| Employer | The benefits leader (HR or total rewards) with the CFO behind them. The broker or benefits consultant advises and often controls access; most employers use one. | Renewals and new vendors are decided in the months before the plan year, which for many employers begins January 1. Open enrollment runs in the weeks before it. |
| Physician practice | The practice owner or administrator; in a larger group, the revenue cycle director or COO. Clinicians champion; administrators sign. | Short cycles, small budgets, high churn. Integration with the practice management system is the gate. |
| Hospital | The VP of revenue cycle, the CFO or the CIO, depending on the seam. Clinical leaders sponsor; IT security and procurement review. | Long cycles tied to budget years and EHR roadmaps. A pilot in one department is the usual door. |
| Therapist or virtual practice | The clinician, or the platform that employs or contracts them. Employer-purchased behavioral programs are bought by the benefits leader. | Fast for tools the clinician pays for; slow for anything that needs the administrator’s cooperation. |
| Payer | Line-of-business leaders (commercial, Medicare, Medicaid), the chief medical officer for clinical programs, the CIO for platforms, procurement for everything. | Annual budgets, regulatory deadlines (the 2026 and 2027 API dates) and bid cycles for government contracts set the calendar. |
Before any data moves, each party has a legal role. The roles decide what can be shared, with whom and under which agreement.
For buildersDecide your HIPAA role on day one. It determines your contracts, your architecture and which seams you can reach.
Health plans, most providers and clearinghouses. Bound directly by the HIPAA privacy and security rules.
A company that handles protected health information for a covered entity: a billing vendor, a cloud host, an analytics product. Bound by HIPAA and by an agreement with each customer.
A business associate agreement states permitted uses, safeguards, breach duties and subcontractor flow-down. A product sold to covered entities signs one with every customer.
Use or disclose only the information the purpose needs, with exceptions that include disclosures for treatment. The rule shapes which fields an integration may request.
Two routes release data from the rules: removing eighteen identifiers (safe harbor) or an expert’s statistical determination. Both have conditions analytics products get wrong.
Records from federally assisted substance use programs follow 42 CFR Part 2, with consent requirements stricter than HIPAA. A 2024 rule aligned parts of it with HIPAA; the remaining differences matter for behavioral products.
State privacy laws can be stricter than HIPAA, and several now cover consumer health data outside it. Check the state of the member as well as the state of the company.
Settle these with the organizations involved. They determine the contracts, data model, permissions and test cases a product needs.
For buildersAnswer these in writing with the counterparties before the first test claim. Each one becomes a column, a state or a contract clause in the product.
Record the sponsor, regulated entity, product, administrator, network, billing provider and payee separately. Use the trading partner’s current routing instructions. An NPI identifies a provider; the other roles need their own identifiers.
Coverage, benefits, contracts and company relationships change. A claim’s service date can matter more than the date your system receives it. Retain the version used for a decision.
Distinguish submission, acceptance, adjudication, payment, correction and appeal. Link remittance to funds, preserve identifiers, and agree how duplicates, reversals and adjustments are handled.
Confirm the purpose and permission for each exchange, the parties’ HIPAA roles and the required agreements. Apply the minimum necessary standard where it applies; treatment disclosures are among its exceptions.
Implementation guidance based on the responsibilities described in this guide. Specific trading-partner requirements must be checked for the actual product and transaction.
“Group” might mean an employer’s coverage group, a physician practice or a corporate family. “Payer” alone leaves several responsibilities unspecified. Each term links to its source.
A person enrolled in coverage. The member can be the subscriber or a covered dependent.
The subscriber is the person through whom coverage is held. A dependent receives coverage through that relationship, such as an eligible spouse or child.
The employer, union or other organization that establishes or maintains a plan. Sponsorship and day-to-day administration can sit with different parties.
In employer benefits, a group commonly refers to an employer’s covered population or contract. A provider group is a practice. A corporate insurance group is a set of related companies. The context determines the meaning.
An employment-related benefit arrangement providing health coverage to employees and eligible dependents. It can be insured or self-funded.
An organization issuing insurance and assuming covered financial risk under the policy. The same company may separately sell administrative services.
A third-party administrator performs contracted administrative work. Administrative services only describes an arrangement in which services are provided for a fee without taking on the underlying claims risk.
The person or entity designated to administer the plan. The legally designated administrator can differ from the vendor that processes claims.
A term commonly used for a health plan or claims-processing counterparty. Ask separately who bears claims risk, who adjudicates and who sends the payment.
The recipient of a payment. The payee is often the group or facility, with the individual clinician recorded separately as the rendering provider.
A clinician, facility or other organization furnishing health care. Rendering and billing roles can belong to different parties.
Providers contracted for a particular plan or network arrangement. Participation is per network and product, so a provider can accept some of a company’s products and stand outside others.
A pharmacy benefit manager administers pharmacy benefits: pharmacy networks, claims processing, formularies and manufacturer rebates, depending on the contract.
A benefit administered separately from the medical benefit, such as behavioral health or pharmacy, often by a different company with its own network and payer ID.
The organization that administers a carved-out mental health and substance use benefit. It can belong to the same group as the medical administrator or to a different one.
An organization that owns both the health plan and the providers, so the payer and the provider seats are the same company.
The sponsor buys insurance; the insurer bears covered claims risk under the policy in exchange for premiums.
The employer assumes responsibility for paying claims. It can purchase administration, network access and other services separately. Two thirds of covered workers are in such plans.
Insurance that reimburses an employer or plan for covered losses above contractual thresholds. It is distinct from the member’s ordinary health benefits.
The amount paid to keep insurance coverage in force, usually monthly. It is separate from the cost sharing incurred when care is used and sits outside the deductible.
The share of premium an insurer spends on medical care and quality improvement. The Affordable Care Act requires at least 80% in the individual and small-group markets and 85% in the large-group market, with rebates below that.
The amount a provider bills for a service, from its fee schedule or chargemaster. The starting point of a claim; contracts decide what is paid.
The amount recognized for a covered service under the plan’s rules or provider agreement. It can differ sharply from the amount billed.
The difference between the billed charge and the allowed amount, written off by a participating provider under its contract.
The amount a member pays for services subject to the deductible before the plan begins sharing those costs. Some benefits apply before the deductible is met.
A copay is a fixed amount for a covered service. Coinsurance is a percentage of the allowed amount. Plan rules determine when each applies.
A limit on qualifying member cost sharing for covered care over the plan period. Premiums sit outside it, and network and plan rules decide what counts.
The running total of what a member has paid toward the deductible and the out-of-pocket maximum in the plan year. The eligibility response reports it as of today.
The list of contracted payment amounts per service between a payer and a provider. Commercial schedules are often expressed as a percentage of Medicare’s physician fee schedule.
A hospital’s list of all items and services for which it has established a charge. Price transparency rules require hospitals to publish it with their negotiated rates.
A hospital’s separate charge for the room, equipment and staff of an outpatient department, billed in addition to the clinician’s professional fee.
A diagnosis-related group. Medicare and many commercial contracts pay one fixed amount per inpatient stay, set by its group.
An outpatient status in which a patient is monitored in the hospital while a doctor decides whether to admit. It can look like an admission to the patient and is paid differently.
A set payment per member for a defined period and set of services. States pay Medicaid managed care organizations this way; some provider contracts use it too.
Payment adjusted for the expected cost of each member’s diagnoses. Medicare Advantage plans are paid this way, which is why documented diagnoses carry financial weight.
Rules that determine payment order when a person has more than one source of coverage. The secondary payer applies its own rules to the remainder.
Plan designs with different network, referral and out-of-network features. The labels describe access arrangements; ownership and funding are separate questions.
A request for payment or benefits for care. A claim contains information about the member, provider, services and charges.
A claim from a clinician or practice for professional services, on the CMS-1500 form or the X12 837P transaction.
A claim from a hospital or other facility, on the UB-04 (CMS-1450) form or the X12 837I transaction, with revenue codes for the facility’s services.
The evaluation of a claim against applicable benefits, coverage, pricing and payment rules. It produces a decision and any financial allocation.
Approval required by a plan for certain care. One condition in a wider coverage and payment process; eligibility and claim rules still apply after approval.
A claim decision that declines some or all benefits. Marketplace insurers denied about 19% of in-network claims in 2024, and under 1% of denials were appealed.
Net patient accounts receivable divided by average daily net patient revenue: how long a provider waits for its money. A standard revenue cycle measure.
An explanation of benefits tells the member how a claim was processed and what they may owe. The bill comes separately from the provider.
Electronic remittance advice tells a provider how a payment and any adjustments relate to claims. It is information accompanying the payment process.
Electronic funds transfer moves money through the banking system. Its trace information can be matched with the corresponding remittance.
An intermediary that validates, translates and routes claims and other transactions between providers and payers.
Records of services delivered. A record is required under capitation too, where a periodic payment covers the services.
A plan’s list of covered prescription drugs, with applicable tiers and coverage requirements. A member’s cost depends on the drug’s tier and the benefit.
The National Provider Identifier identifies a healthcare provider in standard transactions. The plan, the claims destination and the governing contract each need their own identifier.
The electronic address a clearinghouse uses to route a claim to the right adjudication system. One company can have several.
Numbers on the card that route a pharmacy claim to the pharmacy benefit manager’s processing system under the NCPDP standard.
A claim code for where care took place. Code 10 means telehealth in the patient’s home; code 02 means telehealth elsewhere.
An itemized receipt a patient submits to their plan for out-of-network reimbursement after paying a clinician directly.
An estimate of expected charges that providers must give uninsured and self-pay patients under the No Surprises Act.
The legal requirement that mental health and substance use benefits be no more restrictive than medical benefits in financial terms and treatment limits.
A federal law setting standards for many private-sector employee benefit plans and preempting state law for them. Governmental and church plans generally fall outside it.
The summary plan description explains an ERISA plan’s operation and benefits. The Summary of Benefits and Coverage uses a standardized format to describe coverage.
A health plan, a clearinghouse or a provider that transmits standard transactions. Directly bound by the HIPAA rules.
A company that creates, receives, maintains or transmits protected health information for a covered entity, bound by HIPAA and by a business associate agreement.
In the example BlueCard arrangement, the Home Plan holds the member’s policy and the Host Plan is local to the care. Their operational responsibilities differ.
CMS quality ratings for Medicare Advantage and Part D plans. Higher ratings earn bonus payments, which is why plans invest in the measures.
No matching terms. Try a shorter word or a different term.
First edition · Sources checked October 19, 2026. This guide explains common arrangements and selected organizations for people building software. Maya and her plan are fictional; every amount is a synthetic teaching value. Organization examples come only from public filings, annual reports and company websites. For an individual claim or coverage decision, use the applicable plan documents and the member card’s instructions. Outside its scope: state-by-state rules, plan selection advice, complete subsidiary trees, detailed risk adjustment, dental and vision, workers’ compensation and the full appeals lifecycle.
Practitioner review: a payer operations review, a revenue cycle review and a behavioral health billing review are pending, and each reviewer will be credited here once complete. Source code and content are at github.com/standardapplied/health-insurance-guide ↗; corrections with a primary source are welcome as issues or pull requests.