Indirect claim settlement is the standard billing method employed by Swiss health insurance and healthcare service providers. In Switzerland this system is known as “tiers garant”.
“Tiers” is French for “third” and refers to the three primary parties in a health insurance arrangement. The first is you as the policyholder, the second is the doctor, therapist or pharmacist who provides the healthcare service, and the third is the health insurance company.
In a “tiers garant” relationship, your doctor sends your medical bills to you as the patient. You can then review the bill before passing it on to your health insurance provider. You have to pay all your medical bills in full up-front.
After reviewing the bills, your health insurance provider then reimburses your expenses (above what is covered by your annual deductible and 10% out-of-pocket payments). In this system, the insurance company “guarantees” that you will be reimbursed for covered expenses.
Indirect settlement system: Pros
- Patients play an active role in the payment process. You have the ability to review medical bills for errors. If your insurer used the direct claim settlement system, on the other hand, you would have to contact your insurer to correct billing errors in arrears.
- Privacy: Your sensitive medical bills will not automatically be passed on to your health insurer. You have the option of withholding a bill from the insurance company, either because you have a high franchise or because you prefer not to inform a third party about your treatment.
Indirect settlement system: Cons
- You have to pay your bills upfront and deal with the hassles of sending your paid healthcare bills to your insurer by mail.
- Covered costs will be reimbursed by your insurer as stipulated in your policy. The problem: Budget health insurers in particular delay reimbursement for up to three months. If you cannot afford to front money for large medical bills, you might find yourself having a difficult time paying your bills. Your only way out, in that case, would be to ask the doctor or pharmacy for an extended grace period. That can be somewhat humiliating for you, and puts them in an awkward position as well.
When the “tiers payant” system is used, the medical care provider sends their bills directly to your health insurance company, rather than to you (as in the “tiers garant” system).
Many insurance companies prefer the tiers garant system because reimbursing payments requires less administration on their part, reducing their expenses.
It is estimated that 15 percent of all Swiss healthcare bills covered by a tiers garant policy are not forwarded to health insurance companies for reimbursement at all.
Consumer watchdogs, for their part, criticize insurance companies which delay tiers garant reimbursement of medical expenses over long periods.