Claim Formatting: Payer Groups, Payers, Insurance Classes, and Insurances

In WebPT Billing, there are four items that influence how your claims are scrubbed, formatted, and submitted; these are the insurance, insurance class, payer, and payer group. Each item has a specific use and hierarchy. They also appear as elements in your billing reports. 

In this article, we will define each item, explain the related hierarchy, and review how they interact with each other. 

Overview

On the most granular level, we have the specific insurance associated with patients and the plan you bill for their services, which is either their primary, secondary, or tertiary insurance. Then, these insurances are grouped into insurance classes, which are groups of insurances that have the same default billing requirements (i.e. Aetna vs. Medicare Advantage). Next, the insurance classes are further grouped as a Payer. Payers contain the outbound ID, dictating where the claim goes. Finally, Payers belong to specific Payer Groups that dictate how the claim is submitted and in what format. Payer Groups determine which clearinghouse (i.e. Change Healthcare or Waystar) the claims are sent to for processing and whether they are submitted by paper, electronically, etc.

Insurances

Insurances represent the various insurance plans carried by your patients or that you accept/bill. The insurance will be listed as primary, secondary, or tertiary on each patient’s case. Depending on the insurance’s position on the patient’s case different scrubbing, formatting, and payment posting rules are applied. For example, when posting a secondary payment from the Release 835 page, the system will not post any adjustments. 

Insurance Classes

Each insurance is tied to an Insurance Class. An Insurance Class can contain one or more insurances. Insurance Classes are primarily designed to group together insurances that have the same default billing requirements (i.e. require authorization or apply specialty modifiers). The Insurance Class is a key element in financial reporting, especially the aging reports. There are also additional charge scrubbing rules that apply to Insurance Classes. Overall, insurance classes are a method of grouping insurance so that the system treats them in the same way. 

Payers

Payers assign the outbound payer ID, which dictates where the claim goes. Payers also have their own set of scrubbing rules and formatting logic. 

Note: There are some payers that require claims to contain one code over another, which requires code replacements. WebPT Billing uses the Payer to assign specific items like code replacements.

Payer Groups

Payers Groups dictate where and in what format (i.e. paper, electronic) the claim goes out. Payer groups include clearinghouses and paper claim formats. Both have their own unique requirements for how claims are submitted. With that being said, insurances that are processed through a specific clearinghouse are grouped together so that their claims are submitted in the correct format for the clearinghouse to process the claim. The same occurs for paper claims.

Billing Process

Finally, let’s quickly review how they interact with each other. 

1. When a patient is seen by a therapist for a service, the charge for the service is associated with that patient’s insurance assigned to their case (primary, secondary, or tertiary). 
2. Then, the individual insurance being charged for the service flows into WebPT Billing and is associated with a specified insurance class for billing purposes. This informs the system of this insurance’s default billing requirements to process the claim. 
3. Next, the claim is assigned the appropriate outbound payer ID, which dictates where the claim goes and specific scrubbing rules/formatting logic (Payer). 
4. Finally, the claim is then pushed out to the appropriate payer group, which dictates where and in what format (i.e. paper, electronic) the claim goes out. 
5. Once the claim has been processed through the specified clearinghouse or the paper claims are mailed, it is then processed/paid by the insurance provider and the clinic then receives the remaining balance left to pay, which can be paid by the secondary insurance on the patient’s account or is due by the patient.