Health insurance premiums are a major topic of discussion in Switzerland every fall. Less-widely discussed is the way in which payment of medical expenses is settled.
Medical expenses: costs covered by all health insurance providers
In exchange for paying health insurance premiums, policyholders benefit from insurance coverage for their medical expenses. When you have a compulsory Swiss health insurance policy, your insurance provider covers eligible medical expenses expenses in excess of your annual deductible and 10% coinsurance payments.
For example, if an adult policyholder with a 300-franc annual deductible had annual healthcare costs of 3000 francs, they would have to pay 570 francs out of their own pocket (the 300-franc deductible plus 270 francs in coinsurance). The maximum 10% coinsurance you can be expected to pay is 700 francs per year for adults and 350 francs per year for children. After reaching that amount and covering your deductible, the insurance company covers 100% of all additional eligible healthcare costs.
Different claims settlement models are used
The way in which insurance companies pay your medical bills depends on both the healthcare service providers (doctors, hospitals, pharmacies, specialists) and the insurance providers you work with. The amount of coverage you receive is the same, regardless of how your insurer goes about paying your medical bills, but in some cases you have to front the money and claim reimbursement while in other cases the insurance pays bills directly.
Three different payment methods are employed across the Swiss health insurance sector: indirect settlement (known as “tiers garant” in Switzerland), standard direct settlement (known as “tiers payant”) and (more rarely) a second form of direct settlement known as tiers soldant. The amount of time it takes insurance providers to reimburse medical expenses through indirect settlement differs between claims and insurers.
Direct vs. indirect settlement
In indirect settlement (the “tiers garant” model), the healthcare service provider (a doctor, for example) sends bills directly to the policyholder. The insured person pays the bills themselves and then claims reimbursement from their insurer, subtracting relevant deductible and coinsurance payments. When filing claims, policyholders must provide the insurance company with copies of medical bills. You can learn more about indirect settlement here.
Direct settlement or “tiers payant”, on the other hand, eliminates the need to advance payment because healthcare service providers (the doctor, hospital or pharmacy) send their bills directly to your insurer. Your insurance provider pays the bills and charges you for the deductible and coinsurance afterward. Learn more about direct settlement here.
Both models have advantages and disadvantages, but direct settlement is generally considered to be more customer friendly because it allows policyholders to avoid administrative work and having to front payments. Increased use of electronic billing systems has also contributed to the rise of the direct settlement model.
Low-cost insurers like Assura are known for using indirect settlement more frequently than other insurers. This allows these insurers to save on costs by shifting the bulk of administrative work to policyholders. The fact that policyholders occasionally forget to claim reimbursement, or choose not to, is another reason why some insurers employ the indirect settlement model across a broader range of claims than others.
A survey of Swiss health insurance providers by moneyland.ch shows that many insurers already use direct settlement model more frequently than indirect settlement. The portions of medical bills covered by each claim settlement model are shown as percentages on the info pages of policies listed in the health insurance comparison. The majority of Swiss health insurance providers use direct settlement for around two-thirds of cases, and indirect settlement for approximately one-third of claims. The frequency with which each method is used varies widely depending on the category of healthcare provider in question.
Payment methods used for hospital bills
Because hospital bills can be very large, Swiss law stipulates that insurers must pay for hospital stays using direct settlement, meaning that the hospital bills the insurance company directly. The deductible and coinsurance payments are then billed to the policyholder.
A flat-rate copayment of 15 francs per day applies to hospital stays, above the costs covered by your insurance provider. This copayment does not apply to children, students up to the age of 25, or to maternity-related hospital stays.
Hospital treatments which last less than 24 hours are referred to as hospital outpatient services. Insurers may use either direct or indirect settlement when paying for outpatient hospital treatment.
All out-of-pocket costs – including deductibles, coinsurance and copayments – are waived for maternity care – including delivery, prenatal and postnatal checkups.
Payment models used for pharmacy claims
When you buy eligible medicines at a pharmacy, bills are usually paid using direct settlement. The pharmacy sends the bill directly to your health insurance provider, which then bills you for possible deductible or coinsurance payments.
However, some insurers still apply the indirect settlement method to purchases from pharmacies. One example of an insurer which uses indirect settlement for pharmacy bills is Supra, which was recently sold to Groupe Mutuel by low-cost insurer Assura.
Whether pharmacy bills are settled directly or indirectly by insurance companies also depends on whether or not the pharmacy is part of a pharmacy network. Many Swiss insurance providers have partnerships with certain pharmacy networks and use direct settlement for in-network purchases and indirect settlement for out-of-network purchases. You can select a pharmaceutical network under “Medical partner” in the moneyland.ch health insurance comparison to limit results to policies from network partners.
Doctor bill payments
Both the direct settlement and indirect settlement models may be used to pay for care from doctors and specialists outside of hospitals. The benefit-payment method used will depend on the arrangement between each doctor’s medical network or association and on the insurance company in question. Selecting your doctors’ medical networks under “Medical partner” in the moneyland.ch health insurance comparison limits results to policies from insurers which partner with those networks.
So bills may be paid in different ways depending on the insurance company and the healthcare provider you use. Your canton of residence can also play a role. On the other hand, your age, deductible and choice of insurance model (like HMO or telemedicine) has no effect on how medical bills are paid.
Some insurers leave the choice of how bills will be paid with the healthcare provider. Some medical practices inform patients about which claim billing method will be used before providing treatment. In some cases, the patient may be able to choose between direct settlement and indirect settlement.
Claim settlement with supplementary insurance
Insurers may use different bill payment models for their supplementary and compulsory insurance policies. Many insurers use indirect settlement more frequently for supplementary insurance than for compulsory insurance.
Example: If you have an outpatient insurance policy and make a claim on a glasses and contact lens benefit, you will usually have to front the money and then forward the optometrist’s bill to your insurer for reimbursement.
Tiers soldant: the exception
The "tiers soldant" model is a direct settlement method which is similar to the “tiers payant” model but has one key difference. Instead of the insurance company paying your bills and then billing you for the portion to be covered by your deductible and coinsurance, the healthcare service provider bills you for deductible and coinsurance payments and charged the remaining amount to your insurance provider. This shifts the administrative burden to healthcare service providers rather than the insurance provider or policyholder (get more information about the tiers soldant model here).
According to Swiss health insurance providers, less than 1 percent of bill payments are made using the tiers soldant method. Some insurers do not use this model at all, while others only pay bills this way if a healthcare provider specifically requests it.
Reimbursement waiting periods
The amount of time you have to wait before being reimbursed for bills paid using indirect settlement depends on which insurance provider you use. The average waiting period between the time your insurer receives your claim and the point at which they reimburse you can be as short as several working days or longer than a month (with budget insurers).
In autumn, 2016, moneyland.ch reconfirmed the data provided by the BAG survey of 2014 with health insurance providers and the resulting information is clearly shown in the health insurance comparison on moneyland.ch in the “Reimbursement” field which appears on the information pages of individual policies.