Third-party billing lets an insured patient pay only their own share, while the health facility bills the rest directly to the insurer, the HMO or the public scheme. To make health insurance claims simpler, check cover at reception, apply each payer’s rules and submit complete claims. That is how third-party billing stays a service to patients instead of becoming a source of unpaid bills.
Key takeaways
- Third-party billing shifts part of the payment to a payer, with a payment delay for the facility.
- Checking cover at reception, before the service, is the first defence against rejected claims.
- Each payer has its own rules: share covered, limits, exclusions, pre-authorisation, submission deadline.
- Complete claims, submitted on fixed dates, get paid faster.
- Patients should know before the service what they will have to pay.
How health insurance claims and third-party billing work
Three parties are involved: the insured patient, the facility providing care, and the payer. In anglophone West Africa, the payer may be a public scheme such as Ghana’s National Health Insurance Scheme (NHIS), a programme under Nigeria’s National Health Insurance Authority (NHIA), often administered through Health Maintenance Organisations (HMOs), a private insurer, a community scheme, or a company that covers its staff under a retainership agreement.
The patient shows proof of cover, the facility checks eligibility, provides care, collects the patient’s share and bills the rest to the payer. The payer reviews the claim, then pays or rejects all or part of it.
Key terms
- Share covered: the portion of costs paid by the payer, varying by agreement and service.
- Co-payment: the share left for the patient, collected on the day of care.
- Benefit limit: the maximum covered per service or per period; above it, the patient pays the difference.
- Pre-authorisation: approval required by the payer before certain services, such as a planned admission (often an authorisation code from the HMO in Nigeria).
- Submission deadline: the period during which the claim can be filed; after it, the claim is refused.
Example: an employee covered by their company’s retainership visits a clinic in Lagos for a consultation and lab tests. The clinic collects any co-payment, then groups all that company’s staff bills at the end of the month into a single claim batch.
The most common third-party billing problems
Rejections and late payments often have an administrative cause that could have been spotted at reception. Here are the most common situations.
| Situation | Consequence | Good practice |
|---|---|---|
| Expired card or enrolment | Whole claim rejected | Check validity at every visit |
| Service excluded from the plan | Payer does not pay that part | Inform the patient before the service |
| No pre-authorisation | Test or admission rejected | Obtain approval before planned services |
| Benefit limit reached | Excess not reimbursed | Warn the patient or family in time |
| Missing supporting document | Claim put on hold | Checklist of documents per payer |
| Claim filed late | Rejected as out of time | Submission calendar owned by one person |
Checking cover at reception: the procedure
Eligibility is checked before the service, not at billing time. The procedure has six steps, the same at every counter.
- Ask for the insurance or NHIS card, or the cover letter, and an identity document.
- Check that cover is valid: dates, beneficiary, payer, applicable agreement.
- Identify the share covered, limits and exclusions for the planned service.
- For services that require it, check that pre-authorisation has been obtained, or request it.
- Tell the patient how much they will have to pay.
- Record the cover in the patient’s administrative file, with a copy of the documents.
Example: a patient arrives in an Accra clinic for a planned ultrasound, but the pre-authorisation is missing. Reception can offer to let the patient pay for the scan themselves or postpone it until approval comes through. Either way, the clinic does not perform a service it may never be paid for.
Organising billing to payers
Keep a register of payer agreements
For each payer, record contact details, share covered by type of service, limits, exclusions, services requiring pre-authorisation, required documents and the submission deadline. The register is updated every time an agreement is renewed and is available to both reception and billing.
Example: a private hospital in Port Harcourt working with many HMOs and insurers cannot rely on staff memory. One up-to-date sheet per payer prevents errors.
Build complete claims
A claim to a payer usually comes with a summary sheet and the documents the agreement requires: authorisation, prescription, report. A check before submission, by someone other than the person who prepared the claim, limits rejections.
Track payments and rejections
Each claim is followed until payment: date sent, amount billed, amount paid, reason for any rejection. Rejections are analysed by reason so the cause can be fixed at the source, as explained in our method to recover receivables from insurers and mutual schemes.
Keeping the patient informed about their cover
A patient who discovers at discharge that part of their care is not covered disputes or delays payment. Information must therefore be given before the service, in plain words.
- Explain what the plan covers and what remains for the patient to pay.
- Issue a receipt that separates the patient’s share from the amount billed to the payer.
- For inpatients, warn the family as soon as a benefit limit is close.
Example: in a maternity unit in Kumasi, telling the family at admission what they will have to pay for the delivery lets them plan and avoids tension on discharge day. For other causes of unpaid bills, see our article on hospital billing.
Third-party billing and MediFlow
MediFlow is building a billing module, in development, that brings together services, insurance and third-party billing, the cash desk and mobile money.
The cover tracking methods described here prepare the ground: well-organised agreements and documents are easy to carry over into a tool.
Frequently asked questions
Should we accept every insurer or HMO that offers an agreement?
No. Before signing, review the proposed tariffs, the stated payment times, the documents required and the administrative workload. An agreement that brings patients but pays very late can strain cash flow.
What should we do when an insured patient arrives without their card?
Apply a written rule that everyone knows: for example, the patient pays and receives the receipts needed to claim a refund, or has a short deadline to present the card. The rule must be the same at every counter.
How can we shorten payment times from payers?
By submitting complete claims on fixed dates and following up every overdue claim. A named contact at each payer also speeds up the handling of rejections.
Want to see how MediFlow fits your facility? Request a free demo.
