What Is Commercial Insurance Billing?
Commercial insurance billing submits claims to private health insurers — UnitedHealthcare, Aetna, Cigna, BCBS plans, Humana, and regional carriers — that operate either fully-insured products regulated by state Departments of Insurance or self-funded employer-sponsored plans regulated federally under ERISA. Compliance hinges on plan-specific PA rules, in-network fee schedules, the ERISA versus state-DOI appeals distinction, and the federal No Surprises Act for out-of-network emergency and ancillary claims.
- Top 5 commercial carriers (UHC, Anthem/Elevance, Aetna/CVS, Cigna, Humana) cover most commercial volume
- Fully-insured plans regulated by state DOIs; self-funded ERISA plans regulated federally
- No Surprises Act applies to OON emergency, air ambulance, and OON ancillary at in-network facilities
- ERISA §503 requires written denial reasons and a specific 180-day appeal window for self-funded plans
Commercial Insurance Billing Services
A multispecialty group with 12 providers and 18,000 commercial-payer encounters a year typically maintains active contracts with five to eight national commercial carriers — UnitedHealthcare, Aetna, Cigna, the local Blue Cross Blue Shield licensee, and Humana — plus a long tail of regional and self-funded TPAs. Each carrier operates as a portfolio of products: UnitedHealthcare alone sells Choice, Choice Plus, Options PPO, Navigate HMO, fully-insured commercial, and self-funded ASO arrangements where the underlying plan sponsor (often an employer) sets benefit design and the carrier handles claim adjudication only. That is the working baseline of commercial billing: a fragmented private market governed federally by ERISA (29 USC §1001 et seq.) for employer-sponsored self-funded plans and by state Departments of Insurance for fully-insured plans, with the No Surprises Act overlay on out-of-network emergency and ancillary claims since January 1, 2022. This page covers how commercial billing actually plays out across PA gates, fee-schedule discipline, the fully-insured-versus-self-funded ERISA distinction that determines which appeal process applies, prompt-pay enforcement at the state-DOI level, and the federal IDR process for unresolved out-of-network surprise-billing disputes.
Commercial Insurance at a Glance
Americans with employer-sponsored commercial coverage
~157 million
Source: KFF Employer Health Benefits Survey, public
Share of covered workers in self-funded ERISA plans
~65%
Source: KFF, public
Top 5 commercial carriers' market share
~50% of commercial enrollment
Source: AMA Competition in Health Insurance, public
ERISA §503 internal appeal window
180 days from denial
Source: 29 CFR 2560.503-1, public
No Surprises Act effective date
January 1, 2022
Source: Public Law 116-260, public
Federal IDR open-negotiation period
30 business days
Source: 45 CFR 149.510, public
Billing Challenges Specific to Commercial Insurance
Plan-product fragmentation within a single carrier
UnitedHealthcare is not one payer — it is dozens of products with different fee schedules, networks, and PA rules. Choice Plus operates differently from Navigate HMO; an Optum-administered employer plan adjudicates differently from UMR (UHC's third-party administrator for self-funded clients). Aetna sells Aetna Open Access HMO, Aetna POS II, Aetna Choice POS II, plus Aetna-administered self-funded plans where the employer sets the benefit design. The 270/271 eligibility transaction returns the plan name and product code, and missing the product distinction causes claims to scrub clean but adjudicate at an unexpected fee schedule, generating contractual-allowance variances that erode posted revenue.
ERISA versus state DOI: which appeal process applies
ERISA (29 USC §1001 et seq.) preempts state insurance regulation for employer-sponsored self-funded health plans. Self-funded plans must follow ERISA §503 and 29 CFR 2560.503-1: written denial notices with specific reason and plan provision, 180 days for the participant to appeal, and a federal-court cause of action under §502(a). Fully-insured plans, where the employer pays a premium to the carrier and the carrier bears the risk, are regulated by the state Department of Insurance — meaning state-specific external review processes, state prompt-pay laws, and state appeal timelines apply. Practices that misidentify the regulatory regime file appeals into the wrong process and miss the operative deadline.
Prior-authorization gates and step-therapy on injectables and imaging
Commercial carriers maintain extensive PA lists for advanced imaging (MRI, MRA, PET, CT beyond a frequency threshold), specialty injectables (biologics, oncology, immunotherapy), inpatient admissions, and outpatient surgical procedures above a dollar threshold. Step-therapy protocols require documented failure of preferred lower-cost agents before approving a non-preferred biologic. UHC, Aetna, Cigna, and the BCBS plans each contract with PA-administration vendors (eviCore, Optum, Magellan, Care Continuum Alliance) for specific service categories. A practice without a per-payer-per-service PA matrix routinely sees denials on services that would have approved with a 5-minute upfront submission.
No Surprises Act and the federal IDR process for out-of-network claims
The No Surprises Act (Public Law 116-260, effective January 1, 2022) prohibits balance-billing patients for out-of-network emergency services, OON air ambulance, and OON ancillary services rendered at in-network facilities. The provider's payment from the OON commercial plan is set by the qualifying payment amount or, if disputed, through the federal Independent Dispute Resolution process administered through the CMS NSA Federal IDR Portal. The 30-business-day open-negotiation period must be initiated correctly, the IDR submission packet must include the qualifying-payment-amount methodology and provider's offer, and the certified IDR entity selects between the two final offers via baseball-style arbitration. Practices that do not pursue IDR write off the OON-NSA differential when the qualifying payment amount is below contracted-rate norms.
State prompt-pay enforcement and clean-claim definitions
State insurance laws set prompt-pay standards for fully-insured plans (typically 30 to 45 days for clean claims) with interest-penalty provisions for late payment. Texas Insurance Code §843.342 sets 45 days; New York Insurance Law §3224-a sets 30 days; California Health and Safety Code §1371 sets 45 working days. State Departments of Insurance accept provider complaints when carriers chronically pay late. The clean-claim definition varies — some states require complete information to start the clock, others start the clock on receipt regardless. ERISA preempts state prompt-pay for self-funded plans, so the same carrier may pay differently depending on whether the underlying product is fully-insured or self-funded.
What We Handle for Commercial Insurance
Eligibility, plan-product identification, and benefits verification
270/271 verification at every visit with full plan-product detail capture, network status confirmation, deductible and out-of-pocket-max tracking, and identification of self-funded ERISA versus fully-insured products. Patient-responsibility estimation built from real benefit data rather than carrier averages.
Per-payer-per-service prior-authorization matrices
PA submission through carrier portals (UHC Provider, Availity for Aetna and BCBS, CignaForHCP, Humana for Healthcare Providers) and through carrier PA vendors (eviCore, Optum, Magellan). Step-therapy documentation packages built to clear preferred-agent failure requirements on first review.
ERISA §503 appeals for self-funded plan denials
Internal appeals to the ERISA plan administrator with the specific plan-provision citation, 180-day deadline tracking, and external review escalation under the ACA-mandated independent-review process. Civil-action threats under §502(a) when internal appeals are denied without proper review.
State-DOI complaints and prompt-pay enforcement on fully-insured plans
State-prompt-pay tracking per fully-insured product, complaint filings to the state Department of Insurance when carriers chronically violate prompt-pay statutes, and interest-penalty calculation on late payments where state law provides the recovery vehicle.
No Surprises Act IDR submissions for OON emergency and ancillary claims
Open-negotiation initiation through the federal IDR portal, IDR submission packets built with QPA methodology challenge, and certified IDR entity tracking through baseball-style arbitration. NSA dispute outcomes captured against the contracted-rate baseline so leakage is measurable.
Contracted fee-schedule reconciliation and underpayment recovery
Posted-payment-versus-contracted-allowable variance analysis at the line-level, contractual-adjustment audit against carrier fee schedules, and underpayment recovery letters built to the carrier's internal payment-dispute pathway. Repeat-offender carrier patterns surfaced for renegotiation discussions at contract renewal.
Codes Frequently Billed to Commercial Insurance
| Code | Description |
|---|---|
| 99213 | Established patient office visit, low complexity (most-billed commercial code) |
| 99214 | Established patient office visit, moderate complexity |
| 99215 | Established patient office visit, high complexity |
| 99203 | New patient office visit, low complexity |
| 99204 | New patient office visit, moderate complexity |
| 99205 | New patient office visit, high complexity |
| 99381 | Initial preventive medicine, infant under 1 year (commercial preventive) |
| 99391 | Periodic preventive medicine, infant under 1 year (established) |
| 90834 | Psychotherapy, 45 minutes (commercial behavioral-health) |
| 97110 | Therapeutic exercise, 15 minutes (commercial PT/OT timed) |
Last updated: 2026-04-22
Common Questions
Common questions about commercial insurance billing services.
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Request Review arrow_forwardWhat is the difference between a fully-insured and a self-funded commercial plan?
A fully-insured plan is one where the employer pays a premium to the insurance carrier (UnitedHealthcare, Aetna, Cigna, BCBS), and the carrier bears the financial risk of paying claims. Fully-insured plans are regulated by the state Department of Insurance, which means state prompt-pay laws, state appeal processes, and state benefit mandates apply. A self-funded plan is one where the employer pays claims directly out of company funds and contracts with a carrier or TPA only for claim-administration services (UMR, Aetna-ASO, Cigna-ASO, BCBS-ASO). Self-funded plans are regulated under ERISA and preempt state insurance regulation. The 270/271 eligibility response and the back of the patient's insurance card typically indicate which regulatory regime applies.
Why does ERISA matter for commercial billing?
ERISA (29 USC §1001 et seq.) preempts state insurance regulation for employer-sponsored self-funded health plans, which means the appeal process, denial-notification requirements, and recovery pathways are federal rather than state. Under ERISA §503 and 29 CFR 2560.503-1, plan administrators must provide written denial notices specifying the reason and the plan provision relied upon, must allow the participant 180 days to file an internal appeal, and must complete the appeal review within specific timeframes. ERISA §502(a) provides the federal cause of action when the plan denies coverage in violation of the plan terms. Practices billing self-funded plans must follow ERISA appeal processes — filing into a state external-review process for an ERISA self-funded plan typically gets the appeal dismissed for lack of jurisdiction.
How does prior authorization work across commercial carriers?
Each commercial carrier maintains a prior-authorization list specifying which services require approval before rendering. Common categories include advanced imaging (MRI, CT, PET, MRA beyond frequency thresholds), specialty injectables and biologics, inpatient admissions, outpatient surgeries above a dollar threshold, and out-of-network referrals. Carriers contract with PA-administration vendors for specific service categories — eviCore for radiology, Optum for behavioral health, Magellan and Care Continuum Alliance for various specialties. PA submissions are made through the carrier provider portal (UHC Provider, Availity, CignaForHCP, Humana for Healthcare Providers) or directly to the PA vendor. PA approvals must be documented in the medical record and referenced on the claim submission to prevent post-service denials.
What is the No Surprises Act and how does it affect commercial billing?
The No Surprises Act (Public Law 116-260, effective January 1, 2022) prohibits balance-billing patients for out-of-network emergency services, out-of-network air ambulance, and out-of-network ancillary services rendered at in-network facilities (anesthesiology, radiology, pathology, neonatology, assistant surgeons, hospitalists). Patient cost-sharing is capped at the in-network rate. The provider's payment from the out-of-network commercial plan is set by the qualifying payment amount (the median in-network contracted rate) or, if disputed, through the federal Independent Dispute Resolution (IDR) process administered through the CMS Federal IDR Portal. The IDR uses baseball-style arbitration where the certified IDR entity selects between the provider's and the plan's final offers.
What is the federal IDR process and when do we use it?
The federal Independent Dispute Resolution process under 45 CFR 149.510 settles payment disputes for No Surprises Act claims when the provider and plan cannot agree on the payment amount. The process begins with a 30-business-day open-negotiation period initiated through the federal IDR portal. If negotiation fails, either party can initiate IDR within four business days of the negotiation period closing. The parties select a certified IDR entity (or one is randomly assigned), each submits a final offer with supporting credible information about the qualifying payment amount, market rates, provider training, complexity of service, and the IDR entity selects one of the two offers (baseball arbitration). The losing party pays the IDR fee. Outcomes are public on the CMS Federal IDR data dashboards.
What are state prompt-pay laws and when do they apply?
State prompt-pay laws set the maximum window in which fully-insured commercial carriers must pay clean claims, with interest penalties for late payment. Texas Insurance Code §843.342 requires payment within 45 days; New York Insurance Law §3224-a requires 30 days; California Health and Safety Code §1371 requires 45 working days; Florida §627.6131 requires 20 days for clean electronic claims. These laws apply only to fully-insured plans regulated by the state Department of Insurance — ERISA preempts state prompt-pay for self-funded employer plans. State DOIs accept provider complaints when carriers chronically violate prompt-pay statutes, and interest is recoverable on late payments where state law provides the recovery vehicle.
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