In the initial chapter, we learned that a provider in healthcare refers to a licensed professional who delivers medical services, most commonly a doctor. However, in medical billing, the term "provider" can refer to a variety of healthcare professionals and facilities, including physicians, specialists, clinics, and hospitals. In this lesson, we'll explain further provider related terms used in Medical Billing journey which includes claims, In-network, & out of network, PCP, Specialists, referrals, and provider role types. So let's explore each of these in details below:
Claim
claim is a formal request submitted by health care provider to the patient's insurance company in order to get reimbursed for the medical services provided to the patient. A claim is a document / form that contain info about the diagnosis, treatment, patient's insurance information, provider & facility and patient itself information along with medical records (if needed).
In short, it can be called a bill generated by a healthcare provider towards a patient or patient's insurance company.
In-Network & Out of Network
In & out of network refers to whether, a provider or facility has a contract with insurance company or not. The contract is the agreement on rates and prices.
In-Network
In-Network provider, often called a Par-Provider (participating provider) is a healthcare professional or a facility that has a contract with insurance company. This contract is an agreement that includes negotiated rates for services, meaning that patient who utilized in-network provider will generally pay less out of pocket compared to out of network.
Note: Each insurance company runs multiple plans (policies). So the provider or facility have to enroll / contract for each plan separately. Also insurance company will offer enrollment for their new plans (future) when they launch, if provider / facility agree, they be contract otherwise not.
Out of Network
An Out-of-Network provider, often called a Non-Par-Provider (non participating provider) is a healthcare professional or facility that does not have a contract with a specific insurance company or with a particular insurance plan offered by that company. Because there is no negotiated agreement, the cost of services from an out-of-network provider is typically higher for the patient who utilized out of network services.
Note: As out of network providers are not in contract with insurance company, so they are not worried about enrollment for each plan nor need to obey rates set by insurance company for their services.
In-network vs out of network providers:
| In-Network Provider / Facility | Out of Network Provider / Facility |
|---|---|
| Contract / Agreement | |
| In-network providers have agreed to accept the specific insurance plan's negotiated rates for their services, which are always lower than standard charges e.g. if initial office visit cost is $200, may insurance company pay $104.98 including PR. | Out of network providers are not bound by the pre-negotiated rates like in-network. So out of network provider may charge full cost to patient. |
| Cost | |
| Because of the contacted rates. Patient using in-network providers, typically have lower deductibles, copay & coinsurance. | Because of no contracted rates, patient using out of network provider can charge more for their services, potentially leading to higher bills. |
| Note: Due to this reason, many patient prefer in-network providers. | |
| Balance Billing | |
| In network providers handle billing directly with the insurance company, streamlining the process and reducing the potential for balance billing. | Balance billing will occur when providers bill a patient for the difference between the amount they charge and the amount that patient's insurance paid. e.g. provider bill $200, insurance paid $104.98 then provider will send the remaining bill to patient. This often occurs in out of network billing. |
| Claim Processing | |
| The insurance company process in network claims faster and the in-network providers have minimum chances to get denied for the services rendered. | The insurance company processes out of network claims slowly and has a potential risk of denied full reimbursement due to plan limitation like most of the plans only offered in network services. |
| Provider Directory | |
| Insurance companies provide a provider directory listing all in-network providers, which helps patients to find doctors and hospitals near them. This is also called in-network provider list. This also helps providers to get large amounts of clients / patients. | As insurance lists only for in network providers, so out of network providers are not listed in the directory which leads to lower patients / clients traffic. |
|
Example: if the provider is in network and charges $104.98 per office visit as per negotiated rate then due to listed in the directory, suppose insurance will send around the 50 patients to their provider per day which results around $5,249 per day earning and also these patient trusted provider due to insurance reputation whereas out of network provider is not listed in directory so a fewer patients that know him or that trust can go to that provider like out of network provider may get that 10 patients per day multiply by 200 as per the charges equals to $2,000 per day earning. |
|
| Patient's out of pocket | |
| For patients, choosing in-network provider is a key way to manage healthcare costs and maximize the benefits of their insurance plan. | For patients, choosing out of network provider will cost them higher out of pocket which leads to over budgeting health care expenses. |
Conclusion:
According to above, making contract with insurance company is more beneficiary for both providers and patients. Like, in-network providers, facilities, clinics, hospitals, etc. get more traffic towards them. and also patients feel comfort and peace of mind while visiting doctor. Providers are timely reimbursed and saved from denials and disputing. In short, become in network with insurance will lead towards business growth with peace of mind.
PCP
PCP stands for Primary Care Physician. It refers to the main health care provider (like a family doctor) who manages the overall patient's health which includes regular checkups, identify and resolve common health care problems, preventive care checkups, and referring to specialists if needed. In medical billing PCP is crucial and recommends to choose one.
In short, the doctor who checks the patient at first before starting any treatment or going to any other doctor is called PCP.
Examples: A family medicine, internal medicine, pediatrician, general practitioner, nurse practitioner can be a PCP.
Specialist
A specialist is a medical doctor who has received advanced training and expertise in a specific area of medicine known as a specialty. They focus on a particular organ system, disease, or patient population, offering more specialized care than general practitioner.
Examples: cardiologist (heart), dermatologist (skin), neurologist (brain / nerve system), podiatrist (foot & ankle), etc. are all called specialists.
Referrals
In context with medical billing a referral is a formal recommendation from PCP to a specialist, or for specific medical services. Actually it is an authorization, often required by the insurance company, allowing patient to see specialist or receive certain treatment and ensuring the service is covered under the patient's plan. Referral also helps to reduce cost and prevent unnecessary treatments or unapproved services.
Example:
If a patient needs to see a cardiologist, their PCP could first need to evaluate the condition and issue referral accordingly. The cardiologist visit could be then billed to the insurance company with referral on file.
What is Referral actually?
Referral is a written or electronic communication or document / letter issued by PCP towards specialist for the treatment of the patient's current condition. It includes the patient's disease details, the reason for why the patient is referred, and referral number (issued by insurance company upon PCP request). The referral number then later on be used by specialist to get reimbursed.
Referral number is alphanumeric or code depending on the insurance healthcare system and has no specific length or format but can go maximum 20 digits only.
Consequences of no Referral
If a patient sees a specialist without a referral when one is required, then the insurance company may deny the payment, and the patient could be responsible for the full cost of that service.
Frequently asked questions
Can a specialist be PCP?
Some specialist can be a PCP not all. As, PCP focuses on overall health and preventive care. So, specialist that has knowledge of overall health system can be lead as PCP like pediatricians, may have a broader knowledge of children's overall body system can be lead as PCP, same for dermatologist (skin and nail specialist) have knowledge of overall body can be act as PCP, same for ENT (Otolaryngologist) but cardiologist (heart specialist), neurologist (nerve system), gynecologist (specialized in women reproductive health) are all specialized in one type of organ or system cannot be PCP in any circumstance.
In short, every PCP cannot be a specialist while some specialist that fulfill PCP requirement can be PCP.
Can specialist issue referral to another specialist or healthcare practitioner?
Yes, specialist can and often do issue referral to another specialist or health care practitioner. This happens when a specialist encounters a patient with a condition or need that falls outside their area of expertise or when another specialist possesses specialized knowledge or resources, according to health care site.
For example, an ophthalmologist sees a patient and comes to know that the issue with the patient's eyes occurs due to brain problem. Then he can refer a patient to a neurologist for further care.
Note: referral are for ensuring that a patient get best and appropriate care with cost saving.
Provider Role Types
In the US health insurance system different types of provider roles exist and each should have its own place which is required for claim submission, coverage, and compliance In short, the provider types have an essential impact on claims. so let's break it down:
There are five types of provider roles:
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Rendering/ Servicing Provider
The doctor or health care professional who actually performed the services or procedure, in other words, who give the treatment to the patient.
Example: Dr Mariana performs a knee surgery. as she gives the treatment, so she's the rendering / servicing provider.
Claim Impact: Appears on the claim to show who provides the care, even if the billing is done under a group or facility. -
Billing Provider
The entity (person or organization or facility or group) responsible for submitting the claims to the insurance company and receiving payments.
Example: Dr Mariana performs knee surgery under hospital facility, so in this case hospital facility is a billing provider.
So, keep in mind that the billing provider is not the same as rendering in most cases but the doctor can do both rendering and billing like if Dr. Mariana works for her clinic and bill solo.
Common billing providers are hospital, physician group, facility or solo practitioner (doctor works independently and billing on its own name).
Claim Impact: Checks / payments from the insurance companies are directly issued to the billing provider. -
Supervising Provider
Supervising provider is a senior doctor/healthcare professional overseeing the care delivered by another doctor or health care professional (often - mid-level providers like nurse, practitioners, or physician's assistant).
Example: PA (Physician Assistant) sees the patients, while Dr Mariana (MD) supervises the care and sign off. So in this case PA is rendering provider while Dr Mariana is supervising provider.
Claim Impact: Some payers (insurance companies) require the supervising provider on the claim to meet supervision rules. -
Referring Provider
The provider (doctor) who sends a patient to another provider for services / treatment.
Example: A PCP diagnose the patient having a heart problem and refers to a cardiologist. In this case PCP can be a referring provider.
Claim Impact: Required on a claim where referral is the part of the patient's insurance plan. Help demonstrate that a referral process is fully followed. -
Ordering Provider
The ordering provider is the healthcare professional who decides a patient needs a specific test, supply, or service and formally requests it.
- They are not necessarily the one who performs or bills for the service.
- Their role is to document medical necessity like showing that the service ordered is appropriate for the patient’s condition.
- This is important for insurance coverage, especially for things like labs, imaging, and durable medical equipment (DME).
Example: A cardiologist diagnoses the patient and orders a cardiac MRI for further evaluation. In this case, the cardiologist is the ordering provider, and the laboratory or imaging facility is the billing provider when it submits the claim for the MRI.
Claim Impact: On the insurance claim, the ordering provider’s details are included so the payer knows who ordered it and why.Easy to remember:
The ordering provider’s role is not about performing or billing — it’s about authorizing and justifying why the service/supply is needed. Insurers rely on this to approve claims and prevent unnecessary tests/supplies.
Let's simplify the process of these provider's roles using the example below and close the topic:
Alex was experiencing chest pain, so he went to see his primary care doctor, Dr. Rafai, at his clinic. Dr. Rafai examined Alex and determined that he likely had a heart problem, so he referred him to a cardiologist. When Dr. Rafai submitted his claim, he listed himself as the rendering provider (because he performed the exam) and his clinic as the billing provider (since the clinic receives payment).
Next, Alex saw the cardiologist, Dr. Fariha, who runs her own practice and bills under her own name. She evaluated him and decided he needed an MRI. Since she performed the evaluation, she included herself as both the rendering provider and the billing provider on her claim along with Dr. Rafai as referring provider (because he referred Alex to her). Although she was also the ordering provider for the MRI, she did not list herself in that role on her claim.
Alex then went to the laboratory for his MRI. At the lab, Dr. Hassan was the supervising provider, overseeing the process, while his assistant, Rahman (a physician assistant), actually performed the test, making Rahman the rendering provider. In the lab’s claim, Dr. Hassan was included as the supervising provider, Rahman as the rendering provider, Dr. Fariha as the ordering provider (because she requested the MRI), and the lab itself as the billing provider (since the lab receives payment).
Finally, Alex returned to Dr. Fariha, who reviewed the MRI results, provided treatment, and helped him get back to good health.
She bills for that follow-up visit. Claim for follow-up: (Rendering: Dr. Fariha · Billing: Dr. Fariha)
This way, the story flows like Alex’s care journey while clearly showing how each provider role comes into play at different stages.
Quick decoder:
Rendering = does the service now (Rafai for the PCP exam, Rahman for the MRI, Fariha for her visits).
Billing = who gets paid (the clinic, the individual practice, or the facility).
Ordering = who requested the test/supply (Fariha for the MRI).
Supervising = who oversees another provider (Hassan overseeing).
Referring = who refering patient for further treatment (Rafai, referring to specialist).
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