Health Insurance Claims Basics
- Review how the insurance claims process works.
- Learn how to be an informed health insurance consumer.
- Understand the steps to take if your insurance claim is denied
You probably do not enjoy going to the doctor or dentist. Dealing with your medical insurance provider and its paperwork doesn’t rank high on the list of fun activities, either. However, it is important for you to monitor the insurance claims process, in order to avoid paying excessive amounts on your medical bills and to make sure that you get the coverage that you pay for.
Ideally, you will not have any problems with your insurance provider. However, because we live in a less than ideal world, you should take certain steps to avoid problems or to minimize the chances of problems occurring. You also want to be prepared to address a problem effectively, if one arises.
Be an Informed Consumer
Here are some steps to take, which will help you avoid problems and maximize your health care dollars.
1. Know your policy -- Insurance coverage varies from policy to policy. It is up to you to know which kind of medical procedures and treatments your policy covers and which are excluded. Care that is not excluded can be limited. You want to know what portion of your care is covered. Are you obligated for a co-payment? If so, how much will it be? Are you obligated for co-insurance (a percentage of your treatment costs)? If so, what is the percentage? You should also know if you are subject to annual deductibles and, if so, what they are. Deductibles can vary within your policy, depending on the kind of treatment you seek.
2. Check with your insurance provider and doctor beforehand -- Because it can be very confusing to know exactly how your coverage will apply, use your insurance provider and your health care provider to inform you. Check with your health care provider to get an accurate description of the care you are seeking. Then, check with your insurance provider to see how much of your treatment they are going to cover and how much you will be responsible for. It makes a lot more sense to check in advance. This will protect you from unexpected costs and also from paying for a treatment and finding out that your insurance provider is not going to cover it at all.
3. Keep good records -- Whenever you speak with either your health care provider or your insurance company, keep good records. If you speak on the phone, note the day and time of the call as well as with whom you speak. Keep all written records, whether it is paperwork that you receive in the mail or something that is given to you during an office visit. The more detailed your records, the stronger case you can build if there is any dispute.
4. If you have managed care coverage, know who is in your network -- Because you pay more for treatment outside your network, if you have a managed care policy, it is crucial for you to make certain that your provider is a member of your network. For instance, you could be in a hospital whose basic care was approved and covered by your network, but could end up responsible for some care if a non-network physician orders tests. Additionally, any time that you knowingly seek treatment outside of your network, make sure that you know your co-insurance responsibilities.
5. Follow up-- If you are responsible for filing paperwork with your insurance provider, you should make sure that paperwork you send in is received and was processed as you expected. Don’t assume that everything you sent in was received and sailed through the system. You are the one who suffers if your paperwork was lost in the shuffle. You should be able to confirm that your paperwork was received with one phone call. If you receive a bill from your doctor or care provider that you felt was already paid, take immediate action by calling your insurance provider.
Filing a Claim
After you receive treatment, your doctor or care provider submits a bill for payment to your insurance company. When the bill is sent to your insurance company is it called a claim. The insurance company reviews the claim and processes it. Sometimes, depending on your insurance policy, you are required to submit the claim form yourself. For instance, if you have coverage through a Preferred Provider Organization (PPO) and you receive care outside the approved network of care providers, you likely will be responsible for filling out and submitting paperwork. You may also be responsible for filling out paperwork if you have indemnity/fee-for-services coverage. Don’t hesitate to ask your care provider for help with your paperwork. Though they are not obligated to assist you, they have great experience deciphering and submitting insurance paperwork and may be willing to help you.
Once your insurance company receives the proper paperwork, it decides whether or not the services you received are covered by your policy, how much of the cost will be paid to the doctor by the insurance company, and how much you will pay. In a worst case, they can deny your claim entirely.
Denial of Claim
A common problem with health insurance coverage arises when your insurance claim is denied or when you are denied a service you want and need.
You are exposed to different kinds of risks and harm, depending on the type of insurance plan you have.
If you are a member of an HMO (Health Maintenance Organization), you are required to receive approval for the medical procedure and to pay your portion of the bill, your co-payment, before you receive the care. Denial of service for you, as an HMO subscriber, means that you are denied approval for a medical procedure that you want or feel that you need.
If you have coverage through a fee-for-services/indemnity plan or seek out-of-network care in a PPO plan, your insurance claim is processed after you have received the care. Denial, with these types of coverage, results in your provider deciding not to pay out on your claim. In some cases, you have paid the entire fee up-front, in other cases a portion. A denial of your claim either results in you not being reimbursed or being billed for the portion of your bill that remains unpaid.
Here are some common reasons that your claim can be denied:
1. You filled out the insurance forms improperly. Make sure you fill out forms completely and legibly.
2. You did not file your claim in a timely manner. Your insurance provider places a time limit on accepting your claim. If you file your claim after the deadline, it will be denied. It is your responsibility to know your provider's requirements and to meet them.
3. Your treatment was excluded, per the terms of your policy. Every health insurance policy contains some treatments that are excluded. Again, it is your responsibility to know the rules of your policy, as you will bear full financial responsibility if you receive treatment that is not covered. Check with your insurance provider before you get the treatment, to make sure that you are covered.
4. You received treatment without the proper approval and authorization. Make sure that you obtain proper approval and permission, whenever it is required.
Reacting to a Denial
If you receive a denial, you have different options. Again, the type of insurance you have dictates the steps that you can take. As mentioned above, the kind of denial you are likely to receive in a managed care plan is a denial of approval for a specific treatment, procedure, therapy, or medication. With indemnity insurance, it is likely the case that you already received the treatment and the dispute regards a denial from your insurance provider to accept your claim for reimbursement. In either case, the three main steps you can take are the same.
Internal Appeal
The first step is to make your case to your insurance provider directly. Speak with them to rectify the problem. If you are in a managed care plan, attempt to enlist your primary care physician to help make your case for why your treatment is necessary. If you have kept good records, you can bolster your case. Go up the chain of command at your insurance provider until you get a satisfactory answer. Keep all records regarding your dispute claim, too. Also, if you have insurance through work, see if your human resource benefits specialist can offer you any assistance.
External Appeal
If you do not get satisfaction, you can speak with your state’s insurance regulators. Medical insurance is a regulated industry in every state. Some states offer more aggressive protection for health insurance consumers than others. For instance, the State of California offers aggressive protection. In California, if you have a problem with your managed care provider, you can contact the California Office of the Patient Advocate, who can assist you by reviewing the health plan’s decision regarding your complaint.
Legal Help
Lastly, you have the right to seek a legal remedy. You can hire a lawyer and sue your managed care plan. Of course, this is an option of last resort. However, if you feel you have been wronged, it cannot hurt to speak to an experienced attorney. If you have a strong case, you likely can find an attorney that will work on a contingency basis, charging you only if she or he wins the case.
Summary
You pay good money for your health insurance. In order to make sure that you do not waste your hard-earned money, take the proper steps to be an informed consumer. Know your rights and your responsibilities. You are your first line of defense. Take the time to understand how your policy works, what it covers and what it does not. Use your insurance coverage to improve your health and your life. Keep good records and follow-up appropriately, to make sure that your bills were paid by your insurance company. The more thorough you are in these areas, the fewer problems you will have.
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