With the changes occurring in healthcare and insurance, it can be tricky and difficult to understand. Here are a few high-level tips and explanations of commonly used terminology that you will come across during this process.
Filing a claim:
After you receive treatment your doctor or care provider submits a bill for payment to your insurance company. When the bill is sent to your insurance company it is called a claim. The insurance company reviews the claim and processes it. Once your insurance company receives the proper paperwork they determine whether or not the services you received are covered by your policy, how much of the cost will be paid to the doctor by the insurance company and how much you will pay. In a worst-case scenario, they deny your claim entirely.
Denial of claim:
A denial of your insurance claim can result when you receive services that are not covered by your insurance policy. You should review your policy and understand the limitations of your policy before receiving medical treatment. This is essential for elective, non-emergent procedures. If your services are not covered by your insurance this will result in a higher out-of-pocket expense for you.
If you are a member of an HMO (Health Maintenance Organization) you are required to receive approval for the medical procedure and to pay your portion of the bill, your co-payment, before you receive the care. Denial of service for you, as an HMO subscriber, means that you are denied approval for a medical procedure that you want or feel that you need.
A denial of your claim either results in you not being reimbursed or being billed for the portion of your bill that remains unpaid.
Common reasons your claim can be denied:
- The insurance forms were filled out improperly. Make sure the insurance information you submit to your health care provider is accurate and timely.
- The claim was not submitted in a timely manner. It is your responsibility to ensure your health care provider has the correct insurance information at the time of services. Your insurance company places a time limit on accepting your claim. If your claim is filed after the deadline, it could be denied. It is your responsibility to know your insurance company’s requirements and to meet them.
- Your treatment was excluded, per the terms of your policy. Every health insurance policy contains some treatments that are excluded. Again, it is your responsibility to know the rules of your policy, as you will bear full financial responsibility if you receive treatment that is not covered. Check with your insurance provider prior to treatment to ensure you are covered.
- You received treatment without proper approval and authorization. Make sure that you obtain proper approval and permission whenever it is required. Contact your insurance company for more information about pre-authorization.
1. Know your policy: Insurance coverage varies from policy to policy. It is your responsibility to know which kind of medical procedures and treatments are covered under your plan. Some policies require that treatments be limited to strict guidelines. Insurance policy deductibles can vary
within your policy depending on the kind of treatment you seek and/or the treatment you received. If you have any questions concerning wither a portion of your care is covered, your deductible and/or any other coverage options please contact your insurance company.
2. Check with your insurance provider before treatment: It can be very confusing to know exactly how your coverage applies. Check with your healthcare provider to get an accurate description of the care you are seeking. Then contact your insurance provider to see how much of your treatment they will cover and how much you will be responsible for. Obtaining this information before your procedure will protect you from unexpected costs and denied claims.
3. Keep excellent records: Keep detailed records of conversations with your insurance company or healthcare provider. Note the day and time of the call and the name of the person with whom you speak. Keep all written records whether it is paperwork that you receive in the mail or paperwork that is given to you during an office visit. The more detailed your records the easier your insurance company and/or healthcare provider can resolve any issues.
4. If you have managed care coverage, know which providers are “in-network”: When a provider is outside of your insurance’s contracted network you can be left with a higher out-of-pocket expense. Verify that the facility and the physicians are in-network with your insurance. There are cases where the facility is in-network but the individual physician is not.
5. Follow up: If you are responsible for filing paperwork with your insurance provider you should ensure that your correspondence is received and processed in their system. Unfortunately, you are the one who suffers if your paperwork was lost in the shuffle. Contact your insurance company to confirm that your paperwork was received and is being processed.
After payment has been made a provider will typically receive an Explanation of Benefits (EOB)along with the payment from the insurance company that outlines these transactions.
Below is a list of commonly used billing terms and their definitions.
Billing statement — A summary of patient account activity that is sent to patients or guardians updating them regarding the status of a claim.
Claim — Information billed to the insurance company for services provided to the patient.
Contractual write-off/adjustment — The difference between the insurance contracted amount with the health care provider and the actual amount of the charge.
Co-payment (patient responsibility) — The fee per visit paid by the patient or family for health care services. This amount is determined by your medical insurance policy.
Co-insurance (patient responsibility) — The portion (in percent) paid by the patient or family for health care services as determined by your medical insurance policy. If your policy offers an 80⁄20 split, once your deductible has been met, your insurance will pay 80% of the charges and you will be responsible for the other 20%.
Deductible (patient responsibility) — The amount that the patient or family must pay toward health care services before the insurance policy begins making payments. The insurance policy sets this amount; usually, the amount is per calendar year.
Demographics — Patient/guarantor/subscriber legal name, gender, birth date, address, phone number and employer information.
Explanation of Benefits (EOB) — A detailed explanation from the insurance company of the medical services provided to the patient by the healthcare provider.
Financial assistance — Adjustments made for qualified responsible parties, based on financial assistance applications and established financial guidelines.
Guarantor — The legal guardian of the patient who is usually under 18.
Referring physician — The physician who referred the patient to the attending provider or referred the patient to the facility for testing.
Payment arrangements — A formal payment plan set up when the balance due cannot be entirely paid by the due date.
Payor — An entity, whether commercial or government, that pays medical claims.
Primary care physician (PCP) — The provider who is considered your general practitioner. Often they are your normal provider who treats your day to day illnesses or checkups.
Prior authorization/precertification — A formal approval obtained from the insurance company prior to delivery of medical services. Many insurance companies require prior authorization or precertification for specific medical services.