Define the term "payer."

The term "payer" refers specifically to an organization that pays for healthcare services on behalf of patients. This typically includes insurance companies, government programs, and other entities that handle reimbursement for medical services rendered to patients. Payers operate by reviewing submitted claims from healthcare providers, determining the amount reimbursable under their policies, and ensuring that costs are covered for services received by insured individuals.

Understanding the role of the payer is crucial in the revenue cycle because they influence how healthcare providers receive payment for their services. This interaction impacts billing processes, authorization of services, and collection of patient payments, thus being an integral part of the overall healthcare financial system. Recognizing the payer's function helps clarify the dynamics of healthcare reimbursements and the flow of funds within the healthcare industry.