About medical insurance
Ok, I finally typed this up, put it in it's own thread. OK, sorry for the delay, I have the crud going around. It's long, deal, or don't.
This is in reply to:
Originally Posted by ~Rocktar~
So here goes. I have been working for one of the “Big 4” insurance companies in the US for going on a decade. I won’t say which one because I don’t want them to get into my business on social media or cause issues with my job. I won’t disclose anything that is internal, we will cover the basics that apply to all insurance companies. All of this is available freely online so you can verify what you want. The names may change a little bit between companies but the principles all apply. Insurance is one of the most regulated industries on the planet short of maybe nuclear power and weapons. Period.
To begin with, let’s lay out some terms and definitions so everyone can be on the same page.
• Deductible: The amount of money you pay out of your pocket before your insurance pays anything.
• Coinsurance: The part of coverage where you pay part and the insurance pays part. This is what people talk about when they say they have 80/20 or 70/30 or whatever insurance. The insurance company pays a percentage, the member pays a percentage.
• Out of pocket maximum: This is most commonly (not always, some plans don’t count the deductible or copay toward the out of pocket) the maximum amount you should pay out of your pocket in one year. Your play may be a calendar year plan and reset every January first or it could be a plan year plan where it resets whenever the plan documents say it does like July first, October first, whatever. Check your plan specifics.
• Copay: This is the amount you pay for a service at an in-network provider for whatever service you get, no matter how long you see them, 5 minutes, 3 hours, the copay is the same.
• In-Network: A health care provider that has a contract with the insurance company.
• Out-of-Network: Every other health care provider on the planet.
• Allowed amount: This is how much the insurance company says a service should cost for an out of network provider. Insurance companies may have different terms for this but they won’t typically use “reasonable and customary” since that is a term and price list maintained by a third party and they don’t want to shackle themselves with that mess.
• Contracted rate: The agreed upon price for a service decided on between the health care provider and the insurance company and put into the provider’s contract when the provider signs a contract with the insurance company. This typically has nothing to do with the billed amount.
• Insurance: A legal, contractual agreement for the transfer and assumption of risk (cost) between two legal entities.
• Emergent or Emergency care: something that a reasonable and prudent person would say needs immediate or critical care. Car accidents, substantial burns, gunshots, broken limbs, falls, poisoning, etc. are considered emergent or emergency care.
• Urgent care: Anything a reasonable and prudent person would say needs medical care quickly but is not serious or life threatening.
• Medically Necessary: A medical treatment, drug or procedure that has been shown to be effective, safe and appropriate for the condition by peer reviewed research. Note, that something that considered medically necessary can be later determined to not be medically necessary, such as Vitamin D testing or, the reverse, like what may soon happen, breast ultrasound for dense breast tissue.
• Not Medically Necessary: Everything else. This includes cosmetic surgery except for reconstruction, all kinds of so called “preventive care” lab tests, loads of MRIs, CT scans, Rolfing, Dance Therapy, orthotic inserts, joint taping, wound chilling devices, neuromuscular stimulators, forced joint actuators, lift chairs and the list goes on.
• Claim: A contractual agreement from a provider or member to an insurance company saying services happened and that correctly describes the services so that the insurance company can determine coverage.
• Covered or A Covered Service: A medical device or service that is medically necessary and can be applied to the plan benefits for possible reimbursement. Covered does NOT equal paid for 100%.
• Not covered: Everything else.
• Fraud: Any kind of billing for services where the provider is billing something that didn’t happen. This breaks down into a few main categories. Straight fraud, they bill for a service that you didn’t get (getting home and finding out that you paid for a chalupa but it’s not in the bag), Up-charging, where you don’t have the service billed but get some lower priced service (You get charges for the double quarter pounder but only get the single quarter pounder), Fee Forgiveness the provider waives your patient responsibility which means the claim paid more than the plan allows (you get a bill for 13 people for dinner and drinks at a work outing and it shows you spent $400 but in reality, you only had 9 people and the bill was for $270 and you and/or the provider keep the extra), and Unbundling where the provider bills for all the services contained in a package bill along with the package (buying a happy meal and then paying for the fries and drink in it separately on top of the meal price). Pharmacy fraud is similar but mostly limited to getting more pills than the law allows, doctor shopping or a provider selling pills without prescriptions.
• Preventive Care: Care that is appropriate and proven beneficial for everyone in a specific demographic. Breast mammograms, prostate exams, yearly basic blood work, that kind of thing. Just because you have a condition that needs tested so you don’t “flare up” or whatever, does not mean that the test is preventive care since it isn’t for everyone in your age and gender demographic.
• An Appeal: A legal request to review a claim or authorization, usually with additional documentation provided and sometimes from a third party that is not paid for by the insurance company.
• Timely Filing: The time that you or a provider has to file a claim from the day of service. Some states have laws, most don’t. There is also a timeframe for reprocessing/adjusting a claim, filing an appeal, etc. Claims from 5 years ago are trash.
• Coordination of Benefits: A series of laws called Primacy that determine which insurance plan pays first if you have multiple. It is not up to you, the other insurance company or the employer. If you have multiple, no matter if you like them or not, make sure EVERY provider knows it and files with every insurance company. If they don’t, you can legally end up on the hook for the bill.
Ok, so now let’s get into the meat of it.
There are two kinds of medical insurance, employer driven and individual coverage. If you get your insurance through an employer, then it’s employer driven period. If you buy insurance directly from an insurance company or through a broker from the insurance company, then you have individual insurance.
When you get insurance through your employer, YOU don’t have insurance, it isn’t YOUR insurance, it’s your employers and you pay them to allow you to access it. This is important because outside of ACA required coverage for modern plans, the employer has 100% control over what is and is not covered in your insurance plan. Trans surgery not covered, employer, bariatric surgery not covered, employer, bunion surgery, employer. If your employer has an old plan that was created before the ACA, then anything and I do mean anything is on the table to cover or not cover, all at their discretion.
Next separation if employer plans that are Fully Funded or Self-Funded. Fully Funded means the insurance company is paying the bills for the claims. Self-Funded means the employer puts cash into a bank account and the insurance company writes the checks to pay the claims out of that fund. Fully Funded is usually more expensive per person covered and typically for smaller employers. You don’t want someone to get hurt, run up 500K in medical bills and the employer doesn’t have the cash on hand to pay the claims so possibly goes bankrupt. Larger employers go self-funded because they can put hundreds of millions into the account, earn interest and keep whatever isn’t spent through the year. For fully-funded plans, they pay the enrollment fee for each person covered, each month and that fee only changes when they add or remove someone or at the negotiation time. Remember, it’s your employer’s insurance, not yours. The state of Illinois is bankrupt, is self-funded and last I knew, was well over a year delay in paying medical claims except for some public service union management and 2 school districts.
Now, on to the meaty bits. Insurance companies are pretty much the same. Same coverage, same options, same policies and processes. Insurance companies may have different networks and some doctors may be in-network with one and not the other but in the end, they are all the same. The insurance company is paid to deliver customer care, process paperwork and to make sure that everything is done according to regulations in every state they operate in. They don’t make more money by denying claims because denied claims means unhappy employees and unhappy employees means the employer can go to another company. It happens all the time. No matter what you think, this isn’t why claims and authorizations deny.
Why do claims and authorizations deny?
• Simply put, the vast majority (80+%) of denied claims and authorizations are denied because some idiot at the provider’s office did not file required paperwork, filed it wrong, left off something that is necessary, or didn’t submit a claim at all. Claims must have required information that includes, but is not limited to, the patient name/info, employee name/info, provider name/info, the date of service, the procedure done, the diagnosis code, the quantity done and the price. If you miss anything, then it gets denied, period. Most of these are simple fixes that can be handled by a call or going online and talking to your insurance company. Before you blow up, talk to them, it may be something that can be fixed in minutes and you go about your day.
• Insurance companies can’t authorize things or pay claims your Dr office is too lazy to submit. This is VERY common, especially after Covid because a lot of office personnel are incompetent, poorly trained or just plain stupid. It’s hard for providers to get people to show up and piss clean, much less get through training to do a boring job without being on their cell phone all day and it shows. We struggle too but our training is a good bit longer so we hope to weed out the useless before they get to the production floor. Next, when it comes to pre-authorizations, it is a common practice for doctors to submit authorizations requesting procedures that they know you don’t need or that will not be effective for you and then let the insurance company take the heat for denying the authorization. They do this because everyone and their idiot brother think that they know more than the doctor thanks to Dr Google and they don’t want to lose patients. Doctors are not special. If you are not seeing on of the top 1% specialists in some obscure field for something, then they can be replaced easily. Next, a lot of procedures don’t need surgery. Most people with back pain need rest, some physical therapy to strengthen their core and some anti-inflammatories, not surgery. Most knee pain needs rest, elevation and ice, not surgery. Most people with foot pain won’t be helped by orthotics (something like 50% or more get no relief from them), massive amounts of lab tests are done as defensive medicine to stave off lawsuits.
• Insurance company policies regarding procedures are developed, researched and monitored by a team of real doctors. The policy on bariatric surgery is written by a bariatric surgeon, the policy on not covering cardiac calcium scoring is written by a cardiologist and so on. They are reviewed at least yearly or sooner if there is some law or government regulation involved. Your authorization for a procedure is ALSO reviewed by a real, licensed doctor. As much as you want to deny it, they are. In my company, there is a 3 step process after your doctor submits an authorization. First is clerical review, does the submission have all the information and forms filled out correctly. It’s a yes/no pass and if your doctor doesn’t submit anything, they contact the office, ask for info, wait a particular time and if they don’t get anything, it gets denied. Then a nurse reviewer goes through it to make notes, highlight things, check to see what the office says is in the cover letter is actually included and they check the insurance company coverage policy and the person’s specific plan to see if the service can be covered by the plan. Then a doctor goes over it all and makes the final decision.
Despite what people think, every insurance company is using AI and automation to sort through the millions of claims every month to find the ones missing stuff, billing for garbage and so on. It’s not there to deny claims for the hell of it, regulations say we have to process every claim we get so we do, that doesn’t mean they all get paid.
Now, some common issues with claims and how to deal with them:
• Missing information, very common. Contact the insurance then get the missing info or get your dr office to submit the missing info in a timely manner and bingo, the claim can be processed against your coverage. This is the #1 reason by far.
• Coverage lapsed: This is caused by your employer and only they can fix it, assuming it is wrong. Insurance companies are not paying for something that happened when you are not covered. If you get your insurance through an employer, insurance companies are NOT obligated to tell you that your plan has been canceled.
• Service doesn’t match diagnosis: You had an office visit to remove a skin growth but the diagnosis is for hernia. Contact your doctor and get it straight.
• Service is not covered: You got a service your plan does not cover no matter what the diagnosis code is. Typically, this is final and uncorrectable. Some employers may issue an override by sending the insurance company a “Hold Harmless” agreement to cover something but it’s really rare and most won’t because they decided on the plan and don’t want the employees whining to HR all the time.
• Claim requires medical necessity review: You got something done that isn’t common and your doctor needs to provide documentation that it’s really needed. See your doctor office.
• Failure to secure preauthorization: Depending if a preauthorization was submitted, you can work to get the preauthorization approved or, if one was not submitted, then you can appeal.
• Claim missing other insurance information: If you have 2 or more insurances and your plan isn’t paying first, then you need to get the claim submitted to the primary plan. There is no work around, it’s the law. If you think the plans should pay in a different order, then talk with your insurance company, there is a set of steps they can walk through to determine Primacy. You can find those steps by Googling “Medical Insurance Primacy”. Please note, Medicare has it’s own rules and COBRA coverage also has it’s own rules that supersede the standard Primacy law.
• Out-of-network provider bills more than the claim says you owe: In some cases there may be a negotiation, some, maybe not. Legally, they can bill what they want and the insurance company can’t stop them. Also, legally, your plan pays what it pays and won’t pay more unless you appeal and are successful. Usually, this doesn’t happen. Use in-network providers to prevent this.
Now on to precertifications:
• Preauthorization denied for failure to provide documentation: Your Dr office didn’t submit anything. Talk to your Dr office to get them to submit the required medical documentation and request reconsideration. Yes, it must come from a provider, no the insurance company can’t make them do it. This is the # 1 denial reason.
• Precertification denied for failure to meet requirements: The documentation submitted didn’t contain the right information, all the information or the information provided doesn’t meet the standards for the procedure. It may also be the case that you or the doctor didn’t do some or all of the prerequisites. Talk to your doctor, you may be able to get them to fill in the gaps. You may also appeal. Please note, doing physical therapy for a back injury two years ago or an x-ray or MRI last year doesn’t cut it. This is the #2 reason.
• Precertification denied, not a covered service: Your plan doesn’t cover a service. There is no work around, the employer may do an override but good luck, the usual answer is no.
So, on to how to save money using your insurance.
• Start with finding out who is in-network and who is out-of-network and use only in-network providers when you can. You can contact your insurance company or use their app or website. Keep in mind, network status can change from one day to another. Checking in January for a surgery in June is a bad idea. Learn which hospitals, urgent cares and emergency rooms are in-network for YOUR plan.
• When you call your insurance company and get something told to you, your coverage, information about a claim, a preauthorization or anything really, get a reference or call number. Record the day, time, the person you spoke too and the reference number. If you were told something will be covered and later is it not, then this may help you in an appeal.
• Don’t cuss out your customer service person. YOU picked your plan. In most cases YOU picked your provider. YOU got the services. Speak nicely and they may can help you. Be an ass and they will do the bare minimum to help. OH, and recorded calls is for the insurance company protection, quality and training, not to help you get something you want. Appeals people can search them, most agents and managers can’t.
• Don’t cry for a manager, it takes a long time and most of them can not do anything more than the agent on the phone. Covering claims and authorizations isn’t an “at will” or “opinion based” thing, it’s a contract and they can’t override it.
• If you have an issue, try to resolve it with a phone agent, don’t just file an appeal because that usually cuts off all other options. It should be your last resort.
• Never assume anything. Just because your health care provider says they “accept” your company does NOT mean they are in-network for YOUR plan. Just because the provider says something should be covered does NOT mean that it is covered for YOUR plan. Ask your insurance company, they KNOW.
• Don’t assume that every provider in an office or hospital has the same network status as the office or hospital. They are all their own little businesses. They can be in or out-of-network regardless of where they work. Downside, you can get out-of-network bills at an in-network provider. Upside, if Dr jackass is doing surgery drunk, they can term them on the spot, toss them out and tell them they will ship their belongings to them with no delay.
Lastly let’s talk about out-of-network providers. They can bill whatever they want, no matter how insane. I once handled a call for a person that had a substantial back surgery. The assistant surgeon billed $95,000. That is more than the primary surgeon, the anesthesiologist, the hospital, the pre- and post-surgery physical therapy, and everything else added together. They were going off of the old method of assistants getting paid on a percentage of what is billed. That doesn’t happen though legally they can bill it no matter how insane it is. Next, when you go to the ER, there is a good chance that all the providers are out-of-network even at an in-network hospital. Most insurance companies will pay them as if they are in-network when you don’t have a choice in seeing them or it’s an emergency. Some situations may be covered by the “No Suprises Act”. Most are not.
If you have a scheduled surgery, or something done in a doctor office you can pick the facility and other providers to treat you so you may not get the in-network coverage for those providers. Also, if you have an HMO, you may not have coverage at all for out-of-network providers. Talk to your insurance company.
That said, the issue with Anthem Blue Cross and anesthesia charges is this. In emergency situations, out-of-network providers of anesthesia were rounding up billing to the next, full hour. You go in, have a broken arm, they set it and it needs anesthesia to do that, it takes 30 minutes for the procedure, the anesthesiologist would bill an hour or more. They wanted to go with a standard time rate based on the type of procedure and not allow excess billing, thus COST TO YOU over the standard rate unless other measures were taken. Thanks to idiots and dumb people squawking on the internet, they backed off so these bills will keep being over billed.
So, there you have it. A lot of info that I used to cover on the phone with people in like 15 minutes or so. I have been doing this for a decade, your insurance absolutely DOES do this, one way or another. They may have different names and slightly different processes but they all do the same damn thing.
Don’t whine about you didn’t want to read it, I don’t care. If you have questions or need help, I will try to help out as much as I can. I have worked in this field for nearly a decade, have been trained in nearly every medical insurance product there is and now, work on the client side of customer service (the employer HR side where they contact us about some issue or another and want answers or us to fic it) rather than the customer side. Most people’s problems with insurance are summed up above and caused by their ignorance or stupidity. Maybe I can save you some money.
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