What to Do When Health Insurer Won’t Pay : Insurance: A former industry insider says that incorrect payment and claim denials are becoming more common and advises the client to challenge them.
You’ve seen plenty of newspaper headlines about skyrocketing medical costs. In 1988, for example, the U.S. health-care bill was more than $500 billion. Federal, state and local governments paid $228 billion of that, and private insurance companies coughed up another $175 billion.
However, this left $97 billion in health costs that were paid directly by you, the American consumer--an average of about $500 per person, over and above insurance premium payments.
Sound steep? The real significance of these numbers hits home when you’ve run up against a major medical expense and your insurance company refuses to pay.
You may have thought your health insurance would cover your claim, only to find out that it didn’t after you filed. Or maybe your insurer ruled that a test done when you were hospitalized was “medically unnecessary” and refused to reimburse you.
As a former insurance-industry insider who has reviewed claims for both private insurers and Medicare, I’ll let you in on a secret: Incorrect payments or claim denials are becoming increasingly common, and there’s a good chance you’re entitled to a bigger reimbursement. You have little to lose by questioning a benefit payment, and you can gain a lot. But don’t waste time: Many policies have time limits on appeals--often six to 12 months--and the disputed amount must be over $100.
Quite often, claims are denied or underpaid simply because somebody made a mistake. That’s what happened to Henrietta Weber of Albuquerque, N.M., when she submitted a claim to Medicare.
Weber’s doctor told her she needed to have cysts removed from her jaw. The bill for the surgery came to about $500. Weber promptly filled out the insurance form, attached the surgeon’s bill, sent it to Medicare and waited to be reimbursed.
Several weeks later she received a check--for $12. It came with a statement known as the Explanation of Benefits form, or EOB, which outlines the insurer’s reimbursement. This form can often provide the tip-off that an error was made in processing your claim.
After recovering from the shock of her $12 reimbursement, Weber read her EOB carefully. It justified the paltry payment by stating that Medicare doesn’t cover treatment of teeth and gums. Weber realized that Medicare goofed: Jaw surgery is clearly different from teeth and gum treatment.
Weber’s experience points to an all-too-common problem: miscoding, either by the insurance company’s data processors or the doctor and his staff. Every medical treatment has a corresponding numerical code, which is filled in by the doctor. The wrong codes translate into incorrect reimbursements. Unfortunately, the vast majority aren’t detected unless people like Henrietta Weber complain.
Once again the EOB can be your ally. Take a close look at the EOB’s “description of service” column. Services you know were performed by your doctor may not have been included. Or complicated surgery may be listed as a minor procedure, which can then result in a skimpy reimbursement.
Errors are an obvious reason for appealing insurance reimbursements, but they’re not the only one. You can also challenge your insurance company’s judgment and fairness in deciding the allowable costs of medical services. Two common areas of contention are utilization review and doctors’ fees.
Utilization review (UR) is a benign-sounding cost-containment measure that disallows claims the insurance company deems medically unnecessary. Not surprisingly, the UR’s main purpose is to save the insurer money, especially hospital costs. An insurance company’s health-care professionals draw up guidelines that define “reasonable and customary” care for virtually every illness and injury.
Don’t hesitate to challenge an insurance company’s UR decisions. A test or procedure the insurance company decides is unnecessary may well have been necessary in your particular case.
You can also appeal decisions regarding your doctor’s fees. Often, the amount the doctor charged is more than the amount the insurer will reimburse you. An insurance company calculates what’s reasonable and customary based on what it generally pays for the same procedure in your geographic area. Here again, the company may have made an incorrect decision in your case, and you may stand to gain by appealing the reimbursement.
The first step in an insurance appeal is to notify the insurance company that you are dissatisfied with your reimbursement. You may also have other local options: Some community medical associations offer non-binding arbitration on insurance disputes over physicians’ fees; and local Better Business Bureaus sometimes handle insurance complaints as well. If you have questions, call the National Insurance Consumer Hotline at (800) 942-4242.
Remember, too, your documents are the keys to a successful appeal. Make copies of everything, including correspondence.
When Weber realized Medicare had awarded her only $12 for jaw surgery, she gathered up her surgeon’s bill and the EOB and made a personal visit to her local Medicare office. She explained the apparent error to a person in the customer-service department. Medicare agreed with her and sent her a check for an additional $325.
(c) 1990, American Health and Psychology Today Service
