Tiers garant / Tiers payant (Art. 42 KVG)

Concept and Legal Basis

Art. 42 KVG determines who owes the provider’s fee. In the default case of tiers garant (Art. 42 para. 1 KVG) the insured person is the debtor of the doctor’s or pharmacy invoice; they pay and submit the invoice to the insurer for reimbursement, with the insurer deducting the deductible and co-payment. Insurers and providers may, however, agree that the insurer owes the fee – the tiers payant system (Art. 42 para. 2 KVG). In that case the provider invoices the insurer directly, and the insurer subsequently collects the cost-sharing amounts from the insured person. For inpatient treatment, Art. 42 para. 2 KVG has, since the hospital financing revision, mandated that the insurer owes its share directly to the hospital; under Art. 42 para. 3 KVG the insured person receives a copy of the invoice for verification.

Practice and Steering Effect

In outpatient medicine tiers garant has historically prevailed, whereas pharmacies, hospitals and laboratories mostly bill under tiers payant; many insurers now offer tiers payant as a service for outpatient care too. Tiers garant strengthens cost transparency for insured persons, who see and check every invoice, but creates liquidity and collection risks for providers and, with high deductibles, means that invoices below the deductible are often never submitted. Tiers payant simplifies processing, shifts the credit risk to the insurer and allows systematic invoice review before payment. In supplementary insurance under the VVG the billing mode is a contractual matter; for hospital supplementary benefits, cost approval with direct settlement is standard.

Country Comparison

German statutory health insurance follows the benefits-in-kind principle (§ 2 para. 2 SGB V): insured persons receive treatment on presentation of their health card, and billing runs through the regional associations of statutory health insurance physicians; reimbursement is available under § 13 SGB V only as an option, whereas it is the rule in private health insurance. Austria provides benefits in kind with contracted physicians and reimbursement of 80 % of the fund tariff for non-contracted physicians. In international health insurance, tiers payant corresponds to direct billing with a guarantee of payment to the hospital.