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How we Pay Providers

Have you ever wondered how Wellmark pays providers? It's interesting to understand what goes into payment arrangements and how it often results in savings for you.
The maximum allowable fee is the amount (established by Wellmark) for covered services and supplies. Wellmark's amount paid may be based on the lesser of the amount charged for a covered service or supply or the maximum allowable fee.

Wellmark has contracting relationships with PPO or Network providers. We use different methods (like negotiated fees) to determine payment arrangements. 

These payment arrangements usually result in savings. They appear on your Explanation of Benefits statement like this:

  • “Network savings” reflect the amount you save on a claim by receiving services from a participating PPO or Network provider. For the majority of services, the savings reflect the actual amount you save on a claim. However, depending on certain factors, the amount we pay a provider could be different from the covered charge. Regardless of the amount we pay a participating PPO or Network provider, your payment responsibility will always be based on the lesser of the covered charge or the maximum allowable fee.

  • “Amount not covered” is the portion of provider charges not covered under this health plan and for which you are responsible. This amount may include:
    • Services or supplies not covered
    • Amounts in excess of a service maximum
    • Benefit-year maximum or lifetime benefits maximum
    • Reductions or denials for failure to follow a required precertification
    • The difference between the amount charged and the maximum allowable fee for services from a nonparticipating provider

  • “Amount paid by health plan” is our payment responsibility to a provider or to you. We determine this amount by subtracting the following amounts (if applicable) from the amount charged:
    • Deductible
    • Coinsurance
    • Copayment
    • Amounts representing any general exclusions and conditions
    • Network savings
Provider payment arrangements are calculated using industry methods, including but not limited to fee schedules, per diems, percentage of charge, capitation*, or episodes of care. Some provider payment arrangements may include an amount payable to the provider based on the provider's performance. 

Performance-based amounts that are not distributed are not allocated to your specific group or to your specific claims and are not considered when determining any amounts you may owe. We reserve the right to change the methodology we use to calculate payment arrangements based on industry practice or business need. PPO, Network and participating providers agree to accept our payment arrangements as full settlement for providing covered services, except to the extent of any amounts you may owe.
 
*Capitation is payment to health care providers contracting with Wellmark Health Plan of Iowa for certain services according to a uniform amount per patient.