Colombia's healthcare system is organized under the Sistema General de Seguridad Social en Salud (SGSSS), created by Law 100 of 1993. This landmark reform introduced managed competition between insurers and separated insurance (payer function) from service delivery (provider function).
The key actors are: EPS (Entidades Promotoras de Salud) — the insurers that collect premiums from the government (via the ADRES entity) and are responsible for ensuring their enrolled populations receive care. IPS (Instituciones Prestadoras de Salud) — the hospitals, clinics, laboratories, and other providers that actually deliver care. ADRES (Administradora de los Recursos del Sistema de Salud) — the government entity that receives social security contributions and distributes per-capita payments (UPC — Unidad de Pago por Capitación) to the EPS.
In the designed model, the flow works like this: Employers and employees contribute to the healthcare system through payroll deductions. ADRES collects these contributions and pays each EPS a monthly per-capita amount (UPC) for each of its enrolled members, regardless of how much healthcare that member actually uses. The EPS then contracts with IPS networks to deliver care to their enrollees — and pays those IPS based on the services actually provided under the contracted terms.
The payment model between EPS and IPS can take several forms: fee-for-service (pagos por evento), capitation (capitación) for primary care, case rates (grupos relacionados por el diagnóstico), or global budgets for specific service packages.
When an IPS delivers a service to an EPS enrollee, the following process is triggered:
The IPS must verify that the patient is actively enrolled with the specific EPS. This sounds simple — in practice it requires querying eligibility systems that may not be real-time. The service must be covered under the POS (Plan Obligatorio de Salud — now called PBS, Plan de Beneficios en Salud). Services outside the PBS require separate authorization and payment processing through different mechanisms.
If a service above certain cost thresholds requires prior authorization, the IPS must request it from the EPS before or during the delivery of care. In emergency situations there are exceptions — but the documentation requirements are strict. After care is delivered, the IPS prepares an account (cuenta de cobro) with: clinical support documentation, procedure and diagnosis codes using CUPS (Clasificación Única de Procedimientos en Salud), itemized billing aligned to the contract, and the relevant authorizations.
This account is submitted to the EPS — through a digital portal, electronic data interchange, or in many cases, still physically. The EPS has up to 30 days to audit the account under Decree 4747 of 2007. During this audit, they may request additional documentation, apply technical or administrative glosas (partial or full denials), or approve the account for payment.
In theory, this is a functional system. In practice, several structural failure points create endemic delays:
Eligibility verification gaps: IPS often discover — after delivering care — that a patient's EPS coverage had lapsed, changed, or been suspended. With no real-time eligibility infrastructure, this is only caught at billing time.
Glosa culture: Colombian health law allows EPS to apply glosas (denials) to line items they deem unjustified, incorrectly coded, or insufficiently documented. In practice, glosas have become a systematic cash-flow management tool for some EPS — delaying payment while the IPS mounts a defense. Industry data suggests that glosa rates in some networks reach 15–25% of total billed value.
Contracting complexity: An IPS may have contracts with 10, 20, or more EPS entities — each with different procedure code mappings, billing formats, authorization requirements, and payment terms. Managing this complexity manually — which most providers do — is a systematic source of error and delay.
Payment delays beyond legal limits: Despite regulatory frameworks requiring payment within defined windows, EPS payment delays frequently exceed 90, 120, or even 180 days — particularly in the contributory regime and for complex procedures. IPS often lack the legal and operational capacity to enforce payment terms.
For hospital administrators, these dynamics have real financial consequences. Working capital is perpetually constrained as accounts receivable pile up across EPS relationships. Staff time is consumed managing glosas, preparing documentation packages, and following up on pending accounts. Smaller IPS — lacking specialized billing teams — are systematically disadvantaged, losing revenue they are legitimately owed.
The Colombian Ministry of Health has recognized this problem. Successive regulatory interventions have attempted to address payment delays, standardize billing formats, and establish clearer glosa rules. But without shared digital infrastructure connecting EPS and IPS systems in real time, regulation alone cannot solve a problem that is fundamentally structural.
The solution requires a transaction layer that sits between IPS and EPS systems — standardizing billing data, embedding eligibility verification, enforcing authorization rules, and tracking claim status in real time. When clinical events in the IPS system can be automatically translated into properly formatted, fully documented claims ready for EPS submission, and when the EPS can validate those claims against their contract and coverage rules at point of receipt, the glosa cycle shrinks and payment timelines compress.
Colombia is one of the most complex — and most consequential — markets for healthcare financial infrastructure in Latin America. Getting this layer right matters not just for providers and payers, but for the financial sustainability of the entire healthcare system.
