What’s the deal with payment policies?

Payment policies often seem different from payer to payer – which can add confusion to an already complex aspect of health care. However, the differences between the published payment policy and what a provider sees on an evidence of coverage often have nothing to do with the policy itself. The discrepancies are usually the result of variations in the member’s plan design, the provider’s contract, or both.

Accessing payment policies

Most payers’ websites have a section for “Payment Policies.” NHP has a page on our public site dedicated to these policies.

Payment policies articulate the baseline policy for a given service. Usually, these policies mimic guidelines published by organizations like the American College of Radiologists, the American College of Obstetricians and Gynecologists, and the American Society of Anesthesiologists. In other words, the policy is only a starting point.

Providers often reference these policies to understand a payer’s policy for a particular service. But benefit designs and provider contracts can be complex. And both can include exceptions that impact payment. For example, there may be certain payment policy exceptions grandfathered into older provider contracts, so the policy for a specific service may not reflect the final payment to the provider or the final cost to the member.

More often than not, when a provider references a payment policy for a service, the provider may actually be looking for coverage information or for payer-to-provider contract terms. This information can be found in the member handbook and provider contract, respectively.

As more employer sponsors move into self-funded arrangements (ASO) with payers, expect to see more benefit complexity and fewer exceptions to industry payment standards. Learn more about ASO plans here.