I have experienced denied claims and they can be very frightening and frustrating. My first reaction was how is this possible when I pay for health insurance. Most of us do not really know what our health insurance covers and what are the procedures to secure payment. Hopefully, the following can help.
Health insurance companies deny healthcare bills for a variety of different reasons. Normally there is a legitimate reason for the denial. The healthcare consumer should be prepared for such an event. They occur more than you may think. Healthcare providers receive the denials from the insurance company and automatically bill the consumer. The consumer is now responsible financially for the bill. The following are common reasons bills are denied.
- Medically Unnecessary Services
The medically unnecessary denial is a denial that insurance companies use when a claim does not meet their medical criteria for payment. This can occur when your healthcare provider has improperly or did not fully document your medical service.
- Medical Service was not Pre-Authorized
Many healthcare services require the healthcare provider to obtain an authorization from the insurance company, prior to service, to obtain payment. Healthcare providers sometimes miss obtaining a pre authorization. If this occurs, the healthcare consumer can call the ordering doctor and healthcare provider to appeal the denied claim. Most insurance companies will grant a retro pre authorization which means they approve the service after the service was rendered. . If not, the healthcare provider should not bill you.
- Non-Covered Charges or Services
Some healthcare services can be excluded for payment as defined in your health insurance policy. These excluded services are generally those not frequently used by the healthcare consumer or are very expensive procedures. Before receiving or scheduling services, contact your insurance company to insure they are covered.
- Wrong Information on the Claim
Healthcare providers and insurance companies can make errors that will result in a denied claim. Examples for these types of errors are:
- Wrong Insurance Information
- Wrong Patient Information
- Transposed Information on the Claim
- Wrong Information in the Insurances Companies Computer System
Anything can go wrong. Be prepared to deal with these situations.
Insurance companies will send the healthcare consumer an Explanation Of Benefits (EOB) that will have specific codes explaining why a claim has been denied. Take the time to understand the reason for the denial. The reasons will lead you to the next steps in appealing the denials
The Healthcare Consumer Navigator Center has a step by step process as to how to appeal denied claims.
I have gone to doctors offices, laboratories and hospital to receive services without a clue how much the services cost. Healthcare is the only industry that gets away without fully informing the healthcare consumer of prices. Just for fun, the next time you go to receive a medical service, ask the price. Let me know what they said. The following may help.
Most, if not all, healthcare consumers do not understand how healthcare pricing works. In fact, many individuals who work in the healthcare business do not understand how it works. Very sobering and quite frankly, very scary.
Healthcare consumers would not buy a house, car or a gallon of milk without knowing the price. Healthcare consumers are expected to purchase elective services(non-emergent) such as a Surgery, a X-ray Procedure or a Lab Test without knowing the retail price or out of pocket costs. These procedures and tests could cost consumers thousands of dollars. They are purchasing services without any idea of financial liability. Emergent services, like an emergency visit, are almost impossible to price.
Since healthcare consumers are paying more for insurance premiums and are experiencing cost shifting, with higher deductibles and out of pocket costs, the insurance companies and the healthcare industry must provide accurate information to the consumer. In addition, employers need to pressure insurance companies to provide the information to the consumer.
So, what does the consumer do in the meantime? The following are some thoughts.
- Review Your Healthcare Insurance Company Web Site: Some insurance companies have pricing tools on their website. These tools are a start. More refinement is required.
- Healthcare Providers in Your Service Area:Hospitals and other healthcare providers have their own specific retail pricing information. The consumer can call the provider or check their web site. Some states mandate healthcare providers to publish pricing. Most providers have difficulty estimating the amount the insurance company will pay and then providing the consumer with a reasonably accurate out of pocket estimate.
- Private Companies:Entrepreneurial companies are trying to provide pricing information to consumers. The data is helpful but limited.
The healthcare consumer assumes financial risk every time they purchase a healthcare service. They assume their health insurance will pay the designated amount and they will be liable for a predetermined amount. Pricing transparency starts with the insurance companies and healthcare providers. Both have claim information that shows retail prices and what amount has been paid by the insurance company by insurance plan. They could not be in business without that information. The consumer and the employer community should lobby insurance companies and healthcare providers to make the information available to the consumer.
I, like all healthcare consumer, shop for health insurance. In my case, I look at Medicare Advantage Plan. 
Regardless what type of health insurance plans you are shopping for, they are very expensive. Let me know your experiences and frustrations.
Get prepared for healthcare sticker shock. Open enrollment season is beginning and employers are rolling out insurance plans that will shift more out of pocket cost to the healthcare consumer. The out of pocket increases will be in the form of higher deductibles. As employers try to find ways to reduce cost, Telemedicine is starting to surface as an option. This means using Skype like systems for doctors to consult with patients. NOTE…Consumer Navigator has a section explaining Telemedicine. A recent survey by National Business Group on Health, indicating that the expected increase in premiums will be 6%. The premiums for Accountable Care Act Plans are expected to increase at least 10%. The following are survey results from National Business Group on Health and Kaiser Family Foundation.
- 51% of the workers will have a deductible more than $1,000, a first
- Single coverage plans have an average deductible of $1,478 up 49% since 2011
- More employers will offer health saving accounts…some will match employee contributions
- In 2016, 29% of covered workers were enrolled in a high deductible plan that was paired with a health saving account, compared to 20% in 2014. In 2017, 84% of the employer will offer a high deductible with 35% offering only the high deductible plan
The trend to shift costs to the healthcare consumer is continuing at a rapid place. It is becoming more apparent the healthcare consumer must start planning and managing their healthcare. To that end, the Healthcare Consumer Navigator Center has develop a planning tool to guide consumers through the planning process. Go to our home page to find the link.
