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What is the Difference Between a Health Plan and a Payer?

July 24, 2014

The Workgroup for Electronic Data Interchange (WEDI) has conducted ongoing conversations with the Centers for Medicare & Medicaid (CMS) and through those discussions, identified that there are differences in verbiage usage between the terms “health plan” and “payer”. By and large, the healthcare industry tends to use the terms “health plan” and “payer” synonymously. The HIPAA regulation, however, defines “health plan” differently than the way the industry commonly uses the term. This variation in terminology usage has also created additional interpretation issues.

As a result, WEDI engaged ASC X12 to develop this issue brief to aid the industry in understanding the difference between the terms “health plan” and “payer”.

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