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 private insurance companies, which provide customers with health plans that offer cost coverage and reimbursements for medical treatment and care services.
There are three different types of healthcare payors:
A “commercial payor” refers to publicly-traded insurance companies like UnitedHealth, Aetna or Humana, while “private payor” refers to private insurance companies like Blue Cross Blue Shield. A “public payor” refers to government-funded health insurance plans like Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).
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 correct. A payee is the party who receives payment in the exchange of services.