The Insurance Conundrum: Unraveling The Mystery Of Rejected Claims

There are many reasons why your insurance company might not cover your medical bills. It could be due to an error in processing your claim, misinformation, or your healthcare provider billing your visit incorrectly. It is also possible that your insurance company requires additional information, or that the provider is out-of-network. In some cases, you may need pre-approvals or referrals for certain treatments, and if you don't have these, your claim may be denied. It is important to carefully review your insurance plan and understand your coverage before seeking medical treatment to avoid unexpected bills. If you do receive a bill that you believe your insurance should have covered, you can take steps to dispute it, such as contacting your insurance company and filing an appeal.

The provider is not in-network

If your doctor is out-of-network, it means they have not signed a contract with your insurance company to accept a negotiated reimbursement rate as payment in full. In other words, they haven't agreed on a discounted rate for their services with your insurer. This means that if they bill you $160, they'll expect to collect the full $160.

Your insurance plan might pay part of the bill if it includes out-of-network coverage. But you'll be responsible for whatever isn't covered by your insurance—which will be the full amount if your plan only covers in-network care, or if you haven't yet met your out-of-network cost-sharing.

Even if your insurance company makes an exception and treats your out-of-network care as if it's in-network, federal law may not require the out-of-network provider to accept your insurance company's payment as payment in full. For example, if your insurance company has a "reasonable and customary" rate of $500 for a procedure, and an out-of-network provider performs it but charges $800, they can still send you a bill for the remaining $300. This is called balance billing and is generally legal if the provider isn't in your health plan's network.

However, since 2022, the No Surprises Act has protected patients from receiving surprise balance bills from out-of-network providers who treat them at an in-network hospital. So, if your local hospital is in-network with your health plan but the doctor who treats you isn't, you won't receive unexpected out-of-network charges as long as the hospital is in-network.

To avoid unexpected medical bills, it's important to verify that your healthcare provider is in your insurance plan's network. You can do this by contacting your insurance company directly.

Lack of pre-approvals/referrals

Some health insurance plans require pre-approvals or referrals for certain procedures or to see a specialist. If you receive medical care without the necessary pre-approval, your insurer may deny your claim. In this case, it is important to get a referral as soon as possible so that your future visits are covered, and to see if your past claims can be reimbursed now that you have a referral. If not, you can appeal through your insurance company's official process.

Pre-approval, also known as prior authorization, preauthorization, or precertification, is when your health insurance company agrees that a medical service is medically necessary and covered under your policy. However, it does not guarantee that they will pay for the service. Pre-approval rules vary from insurer to insurer, but generally, the more expensive the service, the more likely it is that pre-approval will be required. For example, surgery, MRIs, or hospital visits are more likely to need pre-approval than a simple office visit.

Prior authorization is a formal request made by the medical provider before offering a service, seeking authorization from the insurance company to proceed. Many insurance companies require prior authorization for certain procedures and will deny or approve the procedure based on several factors. Prior authorization may stipulate certain restrictions, such as specific procedure codes or a limited date range for the procedure to take place.

Referrals are usually the responsibility of the patient to obtain from their primary care physician (PCP). The PCP will refer the patient to a specialist or for certain medical services, helping to make the decision about whether specialist services are necessary. In many cases, the patient must visit their PCP, who will then refer them to a specialist and make a note of the referral in the patient's medical records. The referral is usually in writing, but a verbal referral may suffice depending on the insurance plan.

If you are unsure whether a procedure requires pre-approval or a referral, it is best to check with your insurance provider before receiving any non-emergency medical care.

Your insurance does not cover the medical service

If your insurance does not cover the medical service, it is important to understand your health plan's rules for things like prior authorization, using in-network medical providers, and step therapy. It is also crucial to read your policy carefully to determine if the claim was legitimately denied and to understand your out-of-pocket requirements.

• The provider is out-of-network: If your healthcare provider is out-of-network, they will bill your insurance company for the service and then charge you for the balance that insurance won't pay.
• Lack of pre-approvals/referrals: Some plans require referrals or pre-approvals for certain services, and if you don't get these beforehand, your insurer may deny your claim.
• The service is not covered by your plan: It is important to understand what your insurance plan covers and what it doesn't. Speak to a representative of your insurance company to understand why your care was not covered and consider appealing the decision if you feel an exception should be made.

If your insurance does not cover the medical service, here are some steps you can take:

• Contact your insurance agent or HR department: They have a duty to ensure that your coverage protects your interests and can help you contest any claim denials.
• Contact the insurance company directly: Be polite but persistent, and keep a detailed record of all communication. Request a written response and explain the negative effects of the claim denial.
• Appeal the claim denial: You have the right to an internal appeal with your insurance company and, if that is unsuccessful, an independent external appeal.
• Contact your state insurance department: Each state has an insurance commissioner who can help oversee insurance products and consumer issues within the state.
• Make sure the claim was properly coded and submitted: Errors sometimes occur in the billing codes or claim submission. Contact both the health plan and the medical office to ensure there are no errors, and that the reason for the denial is clear to you.
• Understand your out-of-pocket requirements: Sometimes people think their claim has been denied when they are actually just required to pay the out-of-pocket costs associated with their coverage. Read the explanation of benefits from your insurer carefully to understand why you are being asked to pay.

Misunderstanding between provider and insurer

Misunderstandings between providers and insurers can occur for a variety of reasons. For instance, a provider may bill the insurance company for a service, but the insurance company does not pay for it because they consider it to be part of another procedure, a practice known as "bundling." This can result in the patient being charged for the service.

Another common issue is when a provider is considered out-of-network by the insurance company, even though the provider accepts that insurance. In this case, the insurance company will only pay a portion of the bill, and the patient will be responsible for the remaining amount.

In some cases, a provider may incorrectly bill the insurance company, resulting in a denied claim. This can happen if the provider lists the wrong code for a procedure or visit, or if they fail to provide all the necessary information to the insurance company.

It's important to review your insurance plan and understand your coverage and requirements before seeking medical services to avoid unexpected bills and disputes with providers and insurers.

Insurer error

There are several reasons why an insurance company might kick back your doctor's bills, and some of them may be due to insurer error. Here are some possible reasons:

Inaccurate or Incomplete Information

In some cases, your insurance claim may be rejected due to inaccurate or incomplete information provided during the claim process. This could include details about how an incident occurred or the extent of the damage. It's important to provide honest and accurate information to the best of your knowledge when making a claim.

Misrepresentation or Non-Disclosure

If your insurance company finds that you misrepresented information or failed to disclose relevant details when applying for or renewing your policy, they may refuse to pay your claim. This could include withholding information about pre-existing medical conditions or other factors that could impact your coverage.

Failure to Follow the Claims Process

Insurers often have specific procedures for filing claims, and if you deviate from their process, they may use this as a reason to reject your claim. It's important to carefully review and follow the claims process outlined by your insurance company to avoid any issues.

Policy Exclusions or Limitations

Your insurance policy may have certain exclusions or limitations that you were unaware of. Carefully review your policy document to understand what is and isn't covered. If you discover that your claim falls within the scope of coverage, you can dispute the insurer's decision.

Issues with Provider Network

If you receive treatment from a healthcare provider who is out-of-network or not covered by your insurance plan, your insurance company may deny the claim or only pay a portion of it. Always verify that your provider is in-network before seeking treatment to avoid unexpected costs.

If you believe that your insurance company has made an error in kicking back your doctor's bills, there are several steps you can take to address the issue:

• Contact your insurance company: Reach out to your insurance provider and ask them to explain their decision. Review your policy document to understand your coverage and determine if their reasoning aligns with the terms of your plan.
• Request an itemized bill: Obtain an itemized copy of your bill from your healthcare provider and compare it against your insurance coverage. Look for any discrepancies, double charges, or coding mistakes.
• Dispute the charges: If you identify any errors or discrepancies, contact your healthcare provider and request that they correct the bill. Communicate any disagreements with your insurance company and initiate their internal review or appeals process if necessary.
• Seek external assistance: If you are unable to resolve the issue directly with your insurance company and healthcare provider, you can seek assistance from a medical advocate or a relevant government agency, such as the Financial Ombudsman Service. They can help mediate or investigate your dispute and work towards a fair resolution.

Frequently asked questions