Par vs. Non-Par Medical Providers

Learn about the differences between participating (par) and non-participating (non-par) providers. A health care provider can choose to enter into contracts with insurance companies and other payers or not, but there are benefits and drawbacks for their business and their patients.

Participating (Par) Providers

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Par or participating providers are physicians or other health care providers that have an agreement with a particular insurance payer. These agreements outline the terms and conditions of participation for both the payer and the provider.

There are a few implications for participating providers who enter into an agreement or contract with insurance payers. Most importantly, providers must abide by certain rules and regulations set forth by the payer.

Patient Care Services

The patient care services section of the agreement between a provider and a payer includes information regarding medical necessity and utilization management. Each payer may have their own definition of medical necessity based on the standard definition:

"Specifically referring to services, treatments, items, or related activities which are necessary and appropriate based on medical evidence and standards of medical care to diagnose and/or treat an illness or injury or; treatments, services, or activities that will enhance a patient’s health or that the absence of same will harm the patient."

Utilization management requirements indicate the guidelines for obtaining pre-certification, pre-authorization, or other requirement designated for the purpose of ensuring patient quality and cost control.

Patient Responsibility

All payers require that the patient be responsible for some portion of their medical bills. This patient responsibility is represented by a deductible, copayment, and coinsurance amount.

The agreement between the payer and the participating provider also indicates that the provider is required to make every attempt to collect the patient's responsibility.

Billing Requirements

Billing requirements may vary depending on the provider and the terms specified in the participating provider agreement. These requirements specify the details regarding coding information, the processing of claims, claim form information, timely filing, medical records and documentation, appeals guidelines, and reimbursement.

Deciding whether or not to be a participating provider will depend on the payer and how beneficial it will be in achieving the goals of the organization.

Non-Participating (Non-Par) Providers

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Non-Par or non-participating providers are physicians or other health care providers that have not agreed to enter into an agreement with a particular insurance payer, unlike participating providers. They may also be called out-of-network providers.

The major difference between participating and non-participating providers is uncertainty. Providers who choose to be non-participating have no guarantee that they will receive payment from the insurance payer.

Having the Patient Sign an Assignment of Benefits Form

An assignment of benefits form is a form that authorizes the patient's health insurance company to make payments directly to the physician, medical practice or hospital for the treatment received.

While an assignment of benefits is no guarantee a payer will reimburse a non-par provider for services, the provider may be eligible to receive payment for the total charges.

Non-participating providers are not obligated to adjust or discount any portion of the total charges since they are not contracted.

There may be some exceptions specifically for non-par providers that choose to accept assignment for Medicare patients. Medicare requires that non-par providers who accept assignment accept the non-par allowable as payment in full.

Another disadvantage of being a non-par provider is that patients are encouraged by their insurance company to use participating providers only. This could be limiting to a provider because of the potential number of patients that they may be losing to participating providers.

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