payor

A payor, also spelled payer, is a person or organization responsible for making payments to another party. In contract law and business, the payor is the party obligated to remit funds under the terms of an agreement; the recipient is the payee.

In healthcare, payor refers to entities that finance or reimburse medical care. This includes private health insurers as well as public programs such as Medicare and Medicaid. Payors determine coverage, authorize services, negotiate payment rates with providers, adjudicate claims, and issue reimbursements. The relationship among payor, provider, and patient shapes billing, eligibility verification, and patient financial responsibility.

In financial transactions, a payor is the party that sends money. For example, in insurance claims processing, a payor pays the provider; in payroll, the employer is the payor of wages.

The spelling payor is common in U.S. legal and healthcare contexts, while payer is more widely used in everyday English. Both refer to the party that pays; consistency within a document is advised.

Related terms include payee and payer.