Medical claims and next steps

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Dealing with a medical situation, especially if it’s an emergency, can be a stressful time for anyone, and filing a claim can add to the stress and anxiety. To help you navigate the required procedures, including tips on what to do if your claim has been denied, we created a simple guide to walk you through the health insurance claim process.

What happens after you receive a medical care

There are two ways, health insurance claims are handled, after you visit the doctor: either your doctor sends the bill to your insurance or you fill in the claim form and send in the paperwork yourself.

  • The first option where the doctor sends the bill to the insurance happens if you received medical service from an in-network provider. Then the medical provider will do all the work for you.
  • The second option, filling in the claim form and sending in the paperwork yourself, usually happens when your health service provider is not in the network of your insurance company. In this case, your doctor will give you an itemized bill that lists all services and medications that you received and the costs associated with each of them. You attach this list to your claim form that you get from your insurance company. If you need help with filling in the form or have doubts, make sure you contact the insurance to clarify them. That way, you make sure your claim won’t be rejected for some administrative reasons like incorrect data.

What happens after your claim is filed

When your insurance company receives the claim, a claim processor will deal with processing the expense of your medical care. This includes reviewing your claim for completeness and accuracy and also checking whether the services you received are covered under your policy. If the services are covered, the claim processor will also check your copay, deductible and out of pocket maximum.

After this, you will receive an Explanation of Benefits (EOB), a letter from your insurance explaining facts about the claim, stating what they will pay and what the patient needs to pay. The EOB may look similar to a bill but is not a bill. You want to make sure that all the details in your EOB are correct, including names, date of service, charges and member responsibility (copay, deductible and coinsurance).

Your medical service provider will send you the final bill. Compare it to the EOB and if there is any remaining balance, make sure to pay it as soon as possible. If you need to pay the additional money after the insurance company has covered its part, the medical service provider will send a separate bill.

Reasons for a claim to be denied

Most claims processes are simple, but sometimes a claim might be rejected.  Claims can be denied for various reasons, some more difficult than others.

For example, administrative errors may cause rejection. This may not be an enjoyable experience, but it’s a better option as it’s relatively easy to fix.

On the other hand, a claim may be rejected because your policy doesn’t cover the medical service or medication you received, or because the insurance company doesn’t see the medical necessity for the procedure. Make sure you call your insurance to check the reasons behind the claim rejection.

If medical necessity is the reason for denial, but you really need the medical service, you can work with your doctor to provide evidence to the insurance company that you do need the requested medical assistance. 

Sometimes the insurance company will not approve your expensive procedures before you try less costly options. This is called step therapy or “fail first”.

Your healthcare plan may give you the coverage only for medical assistance offered by providers that are part of your plan’s provider network. You may try to convince your insurer that the provider you selected is the only one capable of providing the service, but be aware that you may pay an additional amount in the case that an out-of-network provider is approved.

How to avoid claim denial

The best way to ensure that your claim gets accepted is to do the following:

  • Contact your insurer before scheduling a medical service.
  • Check all the rules about the pre-authorization process, provider network, step therapy and any other aspects that may affect the outcome of your claim process.

Filing claims appropriately is the safest route to avoid a claim denial. Also, try to use the medical care providers (hospitals, doctors, pharmacies, and other services) that are part of your plan’s network of providers. In this case, not only will you minimize the odds of your claim being denied, but your provider will also file the claim for you. If you go out of network, you will have to file the claim yourself.

What are my options if my claim gets denied?

If your claim gets denied, you can always file an appeal. Affordable Care Act gives consumers the right to challenge health claim denials. The Affordable Care Act requires insurers to send instructions about how consumers can initiate an appeal process every time they deny a claim.

A study conducted by the Kaiser Family Foundation shows that, on average, 18% of in-network claims of healthcare.gov issuers were denied in 2017. However, only 0.5% of these are appealed. This is a lost opportunity, as many of these denials end up being reversed. Whatever the reason for rejection, you should not take it as final.

There are four types of appeals.

  • Pre-service (or pre-authorization) appeal. You can submit this type of appeal when your plan has denied your request to receive medical services before you were given the prescribed care. The insurers have 30 days to respond to this type of appeal. 
  • A post-service appeal. You submit it when your health plan has denied a claim for reimbursement or payment of a medical procedure. The insurers have 60 days to respond to this type of appeal.
  • Urgent care (or expedited) appeal. You can request an urgent appeal if you are currently receiving or you were prescribed to receive treatment and your medical provider believes a treatment delay could jeopardize your life or health. Insurers are required to make the decision within 72 hours after receiving the appeal.
  • Marketplace plan appeal. The Affordable Care Act gives consumers the right to appeal a decision made by a state or federal health insurance exchange and the decision must be made within 90 days.

There are usually two levels of appeals both for pre-service and post-service denials. One is internal and is conducted within your insurance company. The second is external when an independent third party reviews your claim. External appeal procedures will differ from state to state as they are governed by state regulation. Don’t underestimate the power of external appeal.

Tips for increasing the odds of appeal approval

  • You will need to submit a letter of support and notes from your doctor indicating the medical reasons for the requested service, as well as any relevant medical literature and peer-reviewed articles documenting the effectiveness of the requested services. 
  • You may also want to write your own letter to explain in your own words the medical condition that you want to treat and how it impacts your life. 
  • You can submit both letters at the same time. Insurance companies are required by regulation to respond to a written appeal, so you will probably receive a response within the next 7-10 days. If that is not the case, contact your insurance company to make sure your appeal was received.

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