Knowledge Center
Issue Briefs

ISSUE BRIEF: What is the Difference Between a Health Plan and a Payer?

July 25, 2014
The bulk of the healthcare industry’s concerns related to the Unique Health Plan Identifier (HPID) land in two categories:

1. Definition of Controlling Health Plan (CHP) and what is specifically required for health plan enumeration. Note: This issue brief does not address this concern.

2. Required use of the HPID in the ASC X12 transactions

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”.