4 Key To Dos When Your Insurance Claim is Denied

Recently, I received letters from a company representing my new doctor attempting to collect payment on lab work from an annual exam; to my surprise, my insurance claim had been denied. The bill is over $900, but it should be zero. My husband works for the city, so we have great coverage under our HMO, assuming I stay in network, which I made sure to do.

My first reaction was to call the company and make sure they had my BCBS information correct. With my non-hyphenated last name, there seems to be a lot of confusion with doctors’ offices. On the phone the agent told me there was no reason these charges should have been denied. She assured me she would get the matter resolved.

Two weeks later, I received two more collection letters that indicated the charges had been declined by my insurance. I’m not sure how other people would react to this, but if I didn’t know better, I might just scramble to pay the bill, even though my insurance should have covered the costs. Getting repeated threats of going to collections can scare any responsible person concerned with their credit score.

But the reality is that 10% of claims get denied by insurance and less than 1% of those get argued by insurers. Movies like Erin Brockovich make us feel like insurance companies are these omnipotent beings that make decisions against which we have little recourse.

Fortunately, that’s not the case. Here are a few things you can do to argue against an insurance claim denial.

1. Find out why your insurance claim was denied

Sometimes denials come from a doctor entering a code incorrectly or a referral getting lost in an office. Find out the reason first and then reach out to your doctor to try to correct things on their end. They can resubmit the request directly, so you can avoid waiting anxiously on the insurance line.

2. Get your documents together

If the matter cannot be resolved through your doctor, call the insurance company to receive a copy of the denial letter and a copy of your policy. The more information you have the easier it will be for others to help.

3. Seek free help

Many states offer help in understanding coverage and advocating on behalf of patients.  For a complete list of state resources, check out Families USA. Additionally, there are many non-profits dedicated to helping families fight unfair insurance claim denials. Here is a list of just a few:

Billadvocates.com

Claims.org

Healthchampion.net

Hospitalbillreview.com

Healthproponent.com

PatientAdvocate.org

Patientcare4u.com

4. Consider legal assistance

If all else fails when an insurance claim is denied, you may need to consider working with a formal arbitrator or suing the insurance company. This can be a very expensive strategy and there is no guarantee it will be successful. The most cost effective way to legally challenge an insurance company’s denial is to go through the state review process. According to a 2010 Georgetown study, this review group favors the patient about 50% of the time. Each state has a different process, so your best bet is to consult with a group like Families USA to determine the best course of action.

Any additional ideas for ways to fight an insurance claim denial?

The risks of high deductible insurance

What are the risks of a high deductible plan?

At GiveForward, we recently expanded our benefits fairly significantly.  It was a proud moment for me and Ethan to finally be able to offer our team both long- and short-term disability, a modest amount of life insurance, and a choice of healthcare plans.

Previously, we had a single plan option with a $350 deductible to prevent our employees from being in the same situation a lot of families on our site face. I thought that, given the nature of our work, most people would opt for more coverage. But much to my chagrin, the majority elected policies with $750-$2000 deductibles.

As CEO of a start-up with a lot of younger employees, I can’t say I was entirely shocked, but I couldn’t help being concerned that we had a group of employees who could not afford their deductibles.

To get a better handle on the personal financial risk our team was facing, I decided to send out a little survey to see if people knew what their deductibles were and to see if they would be able to cover them through a personal savings account, checking account or credit card.

The results were a little disappointing. Roughly 25% of the team has a deductible they can’t cover with personal finances. This got me thinking: If a quarter of my team can’t cover their deductibles, what about the general population?

How often do Americans choose high deductible insurance policies and what are the financial risks they face? As the costs of health insurance premiums continue to rise, many American families are choosing high deductible health plans to help save on monthly bills.

The rise of the high deductible

In 2013, a high deductible plan refers to a plan that requires a deductible of $1250 or more for an individual and $2500 for a family. Often, these plans come alongside Health Savings Accounts (HSAs), which allow you to save pre-tax for medical-related expenses, including co-pays, prescription medicine, eyeglasses, and more. The great thing about HSAs is that the money continues to accrue year after year.

The reality of the high deductible

Ideally, people who choose high deductible plans would be saving enough in these accounts to cover deductibles and out-of-pocket maximums, which vary depending on policies. But the reality is, many families take the monthly premium savings of high deductible insurance and apply those dollars to other essential expenses like mortgages, groceries, and daycares.

The unfortunate result is that many families are not in a position to be able to afford the co-pays and deductibles of a serious illness.

Recently the Kaiser Family Foundation estimated that one in five families will be on a high-deductible plan by the end of 2014. A 2011 study by the National Bureau of Research showed that 50% of Americans would find it difficult to come up with $2,000 in an emergency. And this segment of the population that would struggle to come up with $2,000 is likely the same group opting for higher deductible policies.

This means that in the next years, millions of Americans will not be able to afford the out-of-pocket costs of their insurance plans.

Given the fact that 72 million Americans take on medical related debt each year and 62% of bankruptcies are caused by medical related debt, this is not just a small problem for a few people. This is a massive problem that will get worse before it gets better.

What can we do to avoid risks with high deductible policies?

Encourage people to save

Whether it’s an employee, a friend, or a family member that has a high deductible policy, the best thing you can suggest is for them to create a rainy day fund to cover these costs.

The middle of an illness is the worst possible time to be stressing about money. An HSA or even a personal savings account with enough to cover deductibles is a great way to avoid that financial burden.

Stay in network

The best way to keep costs down is to stay within your provider network as much as possible. Often going out of network can cost a patient 20% or more in co-insurance.

If you do have to see a specialist out of network, make sure to find out in advance what the anticipated costs will be and see if the provider has payment plan options. The last thing you want a loved one to have to face is a collections company calling in the middle of treatment.

Shop around

If you haven’t read the Time article “Bitter Pill,” you should. TL;DR: Hospitals charge dramatically different amounts for the same procedure. If you have some flexibility in where you receive treatment, call around to find out where the most affordable services are offered.

Mediation services

If it’s too late, and someone you know is facing extensive out-of-pocket costs related to treatment, one of the best things you can do is contact a third party to help assess the bills and be an advocate for you. We work with the Karis Group and the Patient Advocate Foundation, both services that can help you save on your existing bills 90% of the time.

As for the GiveForward team members who can’t afford their co-pays, we’re discussing things we can do internally to help prevent financial stress. Some ideas we’re tossing around are:

• A group emergency fund for those who contribute;
• A company sponsored fund with a committee voting system for reimbursement;
• Limiting the selection for next year so deductibles can be no higher than $750;

What ideas do you have to help limit the risk of high deductible policies?

Welcome!

Welcome to my new blog Conversations on Affordable Health Care!  I am starting this blog because there are so many interesting discussions happening around the cost of healthcare, but it can be very difficult to find pertinent information as a general consumer.

My hope is that with this blog, I’ll be able to shed some light on the issues most pressing to regular Americans when they face a medical situation.

If you have any suggestions for content, please contact me!