Understanding your health insurance policy is critical
Failing to understand how, why and when health insurance companies pay claims or refuse to pay claims can mean the difference literally between life and death. Less dramatically, understanding the health insurance contract can mean the difference between a comfortable financial experience during a health crisis or a financial disaster, including bankruptcy.
The first thing to understand is that a health insurance plan is a contract. Consumers who buy health insurance through an employer sponsored health insurance plan, should not just look at the benefit summary. Most larger companies will have employee meetings at which time employees can and should address questions and concerns about their coverage.
Small businesses and individuals may have less opportunity to learn the intricacies of their selected health insurance plan, but they do have resources if they chose the use them. Most state Insurance Departments have a consumer affairs department. The web sites of most State Insurance department’s have a consumer link which answers many of the basic questions.
Both small business owners and individuals owe it to themselves to understand what they are buying BEFORE they buy it. But what happens when your health insurance company just won’t pay a claim. There are things you can do.
1. Don’t assume that the first claim refusal you get is final. Insurance bills are paid based on how the provider codes the service. It is estimated that about 10 – 20% of the bills coded contain errors. Yet only about 1% of consumers question a denial of a claim.
If you have health insurance and a claim is denied, ask questions. Your first call should be to the agent who sold you the policy. Find out if the agent believes the claim should be covered. This assumes you know who the agent is. Many individuals buy health insurance on line without the direct counsel of an agent who will be available to the consumer if problems arise.
The second call should be to the customer service department of the health insurance company. If the error is a coding error, customer service will usually help.
2. Make sure you get an EOB (Explanation of Benefits) from your insurance company. An EOB is mandated by most states and failing to send one does constitute an illegal practice by the insurance company. The EOB should arrive before the bill from the provider, but if you get a bill and have not yet received an EOB, call the insurance company and request a copy of your EOB.
Compare everything on the EOB with the services billed by the provider. Everything should line up. Check dates, descriptions of services, name of the provider and amounts billed. If there is a discrepancy call both the provider and the insurance company and alert them.
3. Review your policy (not just the benefit summary) to determine if the claim was legitimately denied. One of the most common issues is a failure to understand any exclusions or riders which may have been placed on the policy. These should be explained to you before you purchase the policy. If they were not the claim, if it falls under such a rider, may legitimately be denied by the insurance company. This is much more likely in the case of individual polices than with employer sponsored group plans.
An insurance company may try to pay only a part of a claim based on “reasonable, usual or customary” charges,. There are sites now that allow consumers to find out for themselves, exactly what those charges should be. I nsurance companies cannot simply pay the lowest fee in the area.
Another major area of confusion results from a consumer not using a network provider. As discussed before, an HMO has a set network of providers. If the consumer goes to a provider, doctor, hospital or other medical provider that is not in the HMO network, the HMO will not have to pay the claim. There are a few exceptions, but these are unusual and consumers must understand how important it is to use the network provider if there plan is an HMO.
Even with a PPO which many people select because they want the ability to go out-of-network, there is a difference in the insured’s responsibility for the amount billed by an out-of-network provider. As a general rule of thumb, any deductible for a network provider will be doubled if the insured goes out-of-network. If a consumer has a $1500 deductible in network, the out of network deductible will probably be $3000. A $5000 in network deductible quickly turns into a $10,000 deductible out-of-network.
4. Put your complain in writing if you cannot settle the claim within 30 days. If you are getting nowhere with phone calls, put your complaints in writing and be sure an copy the consumer affairs department of your state’s Insurance Department.
5. Enlist the help of an outside arbitrator. Your first call should be to your State Department of Insurance. Most have consumer advocates and this service is free. Some states like New York, Illinois and California, have a good track records assisting consumers in getting claims paid. Some of the State Department of Insurance consumer advocates a basically useless.
If you cannot get reasonable assistance from the Insurance Department in your state consider hiring a medical billing advocate. There are many of these services operating throughout the country. Find a good one and they may be able to negotiate a good settlement of the claim for you.
The last step would be to hire a lawyer. This is a bit more risky, however, unless the lawyer will take the case on a contingency basis. Since this is actually a billing dispute, most good lawyers will not take a case of non-payment of a claim on this basis. You don’t want to compound your problems by adding attorneys fees on top of the billing dispute.
The best advice is to understand what kind of policy you are buying the first place.
Comments