Direct Billing

Function

In international health insurance, in-patient bills quickly exceed the liquidity of the insured person, and many hospitals demand a payment undertaking before admission. Direct billing solves this problem: the insurer confirms to the provider in advance that costs will be met (guarantee of payment) and settles the bill directly after treatment. The Cigna Global policy rules define the guarantee of payment as a binding undertaking by the insurer to pay the provider the agreed costs of a specific treatment; it is issued as part of pre-authorisation once medical necessity has been confirmed. As a rule of market practice, direct billing is available primarily for in-patient and day-patient treatment, while out-patient services are often handled on a reimbursement basis (“pay and claim”) – as described, for example, in the Bupa Global membership guide.

Provider Network and Steering

The basis is a network of contracted hospitals and physicians with agreed tariffs, billing routes and quality standards. Outside the network or without pre-authorisation, many wordings reduce reimbursement, particularly in the USA. Direct billing is therefore also a cost-containment tool: the insurer checks indication, length of stay and tariff before costs arise and can steer the insured person towards suitable facilities. In Switzerland the principle corresponds to the tiers payant under Art. 42 KVG, as opposed to the tiers garant, where the insured person remains the debtor of the invoice.

Practical Note

For assignees in countries with an up-front payment culture, the density of the insurer’s network at the place of assignment is a more important selection criterion than nominal limits. Points to clarify include round-the-clock availability of the pre-authorisation desk, deadlines for notifying emergencies, and the handling of deductibles and co-payments that the insured person must still pay to the hospital despite direct billing.