Payer

A payer is an individual or organization that discharges financial obligations by making payments for goods, services, or debts. In general finance, the term identifies the party that issues payment to another party, the recipient being the payee. In healthcare and social programs, a payer is typically an entity that finances or reimburses medical care.

In healthcare, payers include private health insurers, employer-sponsored benefit plans, government programs such as Medicare and Medicaid, and, in some cases, self-insured employers that fund care through a third-party administrator. Payers contract with providers to establish reimbursement rates, coverage rules, and network participation.

Payer responsibilities include collecting premiums or contributions, determining beneficiary eligibility, processing claims, making payments or denials, and handling appeals. They also manage networks, implement utilization management, and oversee programs aimed at cost control and quality, such as risk adjustment or value-based purchasing.

Common arrangements between payers and providers include fee-for-service contracts, capitation, and value-based contracts. The payer's role is central to claims processing, coding and data standards (such as standardized electronic claims), and regulatory compliance. Payment integrity and fraud prevention are additional areas of focus.

Outside healthcare, "payer" may refer to any party that issues funds in a financial transaction, contrasted with the "payee" who receives the funds. The term is widely used in accounting, banking, and e-commerce.