What are payor programs?
A payor program allows you to create a series of rules at the client level for determining which payors are invoiced for what portion of a client's billable items in a billing period.
Each payor program for a client contains a set of informational fields and benefit rules referred to as a policy or contract, depending on the type. The benefit rules determine how much will be billed to the payor on the policy/contract.
You can create different versions of the benefit rules on a policy or contract with different effective dates or start and end dates. The dates of different policy/contract versions cannot overlap with one another.
The payor on the policy or contract is the bill-to party who will be invoiced for a portion of the billable items dictated by the rule set on the policy/contract. The guarantor is the bill-to party who will be invoiced for the remainder of the invoice balances after the program rules have been applied to the billable items.
Once you have created your payor program, you must attach it to any client services or billing premiums for which the rules on the program should apply. When adding a program to a service or client billing premium, you must also select a rating funder. This rating funder will use the associated bill codes to determine the rates that will be used to bill for the service or premium during the invoice generation process.
Once items are approved and you begin the invoice generation process, the system will apply the rules on the payor program using the rates associated with the rating funder and generate the invoices for the different bill-to parties.
What types of payor programs are available?
There are different types of payor programs. The type determines the kinds of rules you can set to determine how to split an invoice during the billing process. The type that you select for a payor program will dictate which rule fields and informational fields will be available for completion when adding a policy or contract to a client’s profile.
The following types of payor programs are available to enable upon request:
Long-term care insurance
Long-term care insurance is a type of payor program that is specifically designed for situations in which a portion of a client’s care is covered by one or more long-term care insurance policies.
In long-term care insurance, the set of rules added to a program is referred to as a policy. You can add multiple policies to a single program and determine the sequence in which the policies will apply (in other words, once the rules on one policy have been applied to a billable item, the rules on the next policy in the sequence will be applied, as long as multiple policies are currently in effect).
Lifetime maximum is also an available term or limit frequency in long-term care insurance programs. The lifetime maximum is the total amount that can be used for coverage. The policy will no longer be in effect as soon as the lifetime maximum is reached.
You also have the option to add a deductible. You can either to choose to set a deductible amount that the guarantor will be invoiced for before the benefit rules on the policy go into effect or set an elimination period representing the number of days during which the guarantor will be invoiced for the full amount of the billable items until the benefit rules can be applied. You can select either Elimination by service days or Elimination by calendar days depending on how the policy determines the elimination period.
Note that the funder type of the guarantor must be client individual in long-term care insurance policies.
Co-payment is a type of payor program that is used when there is an agreement that a client will share the cost of care with another party. Co-payment works well in many split billing scenarios where government funding or another type of coverage will cover up to a certain amount of the client’s care and the client/guarantor is responsible for the rest of the cost.
In co-payment, the set of rules added to a program is referred to as a contract. Only one contract can be added to a program (in other words, sequencing multiple contracts so that different rule sets are all in effect at one time is not possible). However, you can still create different versions of the contract rules with different effective dates.
You also have the option to add a deductible. You can either to choose to set a deductible amount that the guarantor will be invoiced for before the rules on the contract go into effect or set an elimination period representing the number of days during which the guarantor will be invoiced for the full amount of the billable items until the rules can be applied. You can select either Elimination by service days or Elimination by calendar days depending on how the contract determines the elimination period.
The funder type of the guarantor can be client individual or funder individual for co-payment programs.
Split percentage is a type of payor program that allows you to generate invoices for billable items according to the percentages set for each payor on the contract version currently in effect on the program. Split percentage works well in billing scenarios where various payors are responsible for a fixed percentage of the overall cost of a client’s care.
You can only have one contract on a split percentage program in effect at one time. However, you can delete contracts and create multiple versions with effective dates, payors, and percentage breakdowns.
For this program type, you can set different guarantors at the program and contract levels. The guarantor at the program level is responsible for covering the full cost of billable items when there is no contract coverage in effect. In this scenario, only one invoice will be generated with the program guarantor as the bill-to party. The guarantor at the contract level is responsible for covering the remaining cost of billable items for client in a billing period after the distribution percentages for all the payors have been applied.
Note that the distribution percentages for each payor on a contract are always applied to the total cost of billable items, not the remaining amount after the percentage covered by the first payor has been applied. (For example, if payor 1 covers 50%, payor 2 30%, and the guarantor 20%, for a visit that costs $100, payor 1 will be invoiced $50, payor 2 $30, and the guarantor $20).
You also have the option to split premiums as well as visits between multiple bill-to parties. When setting up the program for the client, you can choose whether you wish to split premiums based on distribution percentages or whether all premiums will be 100% covered by either a payor or guarantor.
Co-contribution is a type of payor program that allows a single bill-to party (the guarantor) to cover 100% of a client’s services while another party (the payor on a contract or the same payor as the guarantor) contributes a set amount on a set frequency and covers any selected premiums.
In co-contribution, the rules on the contract determine how much and how frequent the payor’s contribution will be. Only one contract can be added to a co-contribution payor program. However, you can add multiple versions of the contract to the program with different effective dates.
You can also set a limit on how much the payor can contribute over a specific frequency on the contract. For example, the payor might have a contribution of $40 per day with a limit of $200 per week. Once the limit is reached, the remaining amount will be billed to the guarantor.
On the master invoice screen and AlayaCare standard invoice, payor contributions will be displayed as miscellaneous charges of type automatic.
How do I create a payor program for a client?
You must be in a role configured with the View Payor Program and Manage Payor Program ACLs in Settings>Roles and Permissions to view, add, and edit payor programs for clients.
To add a new program, go to Accounting>Payor Invoicing on the client’s profile and select +Add Program.
In the dialogue, select the type of payor program you wish to configure. The options available to select will depend on the options enabled for your organization.
Select a guarantor and billing frequency and choose whether to apply taxes. The fields and options available to select will vary based on program type. Click save to continue.
In the next screen, select +add contract (or +add policy) to add rules to the payor program.
The fields available to complete will depend on the type of program selected.
Long-term care insurance:
If the program type allows contract/policy versioning, you can add new versions of the rules with new effective dates by selecting +add version.
For details on how to create a program of each specific type, download the attached user guide.
How do I attach a payor program to services and client billing premiums?
Once you have created a payor program for a client, you can attach it to their services and billing premiums.
To add a program for a client, go to the services list on the client’s profile and select +create a service.
In the funder methodology dropdown, the different types of payor programs will be available for selection. Choose the type of the program you wish to apply. Next, select the name of the program in the program dropdown and choose the correct rating funder. The funder you select here will determine which bill codes will be used to invoice billable items tied to the program.
Note that the rating funder does not have to be the funder selected for either the payor or guarantor on the payor program. It is simply used to determine the rates that should be applied the billable items tied to the program.
When you have finished completing all required fields, click create.
Note that the program on the service cannot be changed after an invoice is generated for the service.
To add a program to a client billing premium, go to Accounting>Billing premiums on the client’s profile and select +create premium.
In the funder methodology dropdown, the different types of payor programs will be available for selection. Choose the type of the program you wish to apply. Next, select the name of the program in the program dropdown and choose the correct rating funder.
Select a premium code, complete the remaining required fields, and save the billing premium.
Note that the funder methodology cannot be modified on the client billing premium once. A new premium will need to be created (and the current one disabled) if the program no longer applies to the premium.
To learn how to generate invoices for a payor program, see Billing periods (payor programs and single payor).