In healthcare, a payor is a person, organization, or entity that pays for the care services administered by a healthcare provider. This term most often refers to health insurance companies, which provide customers with health plans that offer cost coverage and reimbursements for medical treatment and care services.
The three main different types of healthcare payors are government/public payors, commercial payors, and private payors.
Government payors include U.S. government-funded health insurance plans like Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). These programs help support certain populations and economic statuses.
Commercial payors most often refer to publicly traded insurance companies like UnitedHealth, Aetna, or Humana that provide individual and group health insurance plans. People are often covered by these types of plans through their employers but can also purchase them directly, or through an insurance marketplace.
Private payors sometimes refers to private insurance companies like Blue Cross Blue Shield. These plans are similar to commercial plans that are available through an employer, from the insurance company, or through a marketplace. Private pay for insurance can also include non-insurance payment for healthcare services such as paying cash directly for a service rather than going through insurance.
What’s the difference between “payor,” “payer” and “payee”?
The terms “payor” and “payer” have the same meaning and are often used interchangeably. The American Medical Association (AMA) recognizes “payor” as preferable. Definitive Healthcare has adopted the same standard spelling.
A payee is the party who receives payment in the exchange of services.