Health Insurance Claim Denied? Now What?

We pay a lot for our health insurance, too much if you ask me. So when we end up sick or injured and actually have to use it, nothing’s more frustrating than seeing a denial come through the mail.  Am I right?

I read in a 2017 study by HFMA (Healthcare Financial Management Association) that $262 billion in medical (read hospital) claims were initially denied in 2016. Another study by (Government Account Office) GAO, found the rate of denials varied significantly across insurance providers—from 6 to a whopping 40 percent.

The silver lining? The HFMA study also reported that 63 percent of the claims initially denied were eventually paid.  My family members and I have been the recipient of many, many medical insurance claim denials. Luckily, we’ve been able to get most of them paid. And if you follow some of these tips you should be able to get some of yours paid too.

First and foremost: Read your policy. A lot of problems (read denials) can be avoided when you understand what’s covered and what’s not.

  • Sometimes you think a procedure will be covered, but find in the fine print it is excluded. Finding this out before the procedure, especially if it’s an elective surgery, could save you from a big financial nightmare.
  • Is there a network that you must stay within? Using an out-of-network provider or facility can result in a denial or a reduction in benefit at the very least. Just because the doctor is in the network doesn’t mean the facility he is using for your procedure is. Always check ahead of time.
  • Does your plan require a referral or pre-authorization? Diagnostic tests like MRIs and CT scans often require pre-authorization from you insurance company.  Be your own advocate: ask the doctor ordering the test if they are going to be taking care of the pre-auth or obtaining the referral on your behalf. Don’t assume they are going to or you might end up being responsible for the bill.

Did they send the bill to the wrong insurance company?  Did your insurance change since the last time you saw this doctor?  Make sure the bill went to the correct company.  Sometimes families have coverage from two different policies.  If that’s the case then coordination of benefits (COB) could be the problem.  Depending on the circumstances, errors can occur when determining which insurance is primary vs secondary.

Transcription errors are often the culprit. Make sure names are spelled correctly and all important data like dates of birth are correct.  Typos happen more often than you think. Those claim can easily be fixed and resubmitted for payment.

The reasons for some denials aren’t as easy to identify or rectify as others. Don’t hesitate to call your insurance company (the customer service number is on the back of your insurance card or listed on your denial letter or EOB) or your medical provider if you don’t understand the reason for the denial listed on your Explanation of Benefits. Sometimes there are diagnosis or procedure coding issues, insufficient medical necessity or timely filing issues.

The two most important things to do when inquiring about a denial is to keep calm (emotions can run high during these circumstances!) and take lots of notes. Always ask for the name and title of the person you are talking to and jot down the time and date of the phone call. Before hanging up ask if there is a reference number associated with the conversation and be sure to write that down as well. There was a time when my son was having a procedure and I called both the insurance company and the surgery center prior to the procedure to verify it was in-network since I couldn’t find it listed.  Afterwards, insurance denied the claim saying the facility was out-of-network. It turned out the surgery center did not become an in-network facility until one week after his procedure.  Since I was able to provide the name of the person I spoke with, date and time of the call, along with the reference number provided during the conversation the insurance company paid the claim at the in-network rate.

If you don’t understand the reason for the denial ask questions until you do. Then if you still think the claim should be paid gather the necessary evidence you might need to get the claim paid: including referrals, prescriptions, or other relevant information. Also speak with your provider.  They want the claim paid as badly as you do.  See if there is anything you can provide to help with the appeal process.

Remember, appealing a denied claim takes time.  It’s important if you are working it out on your own to let the provider know what’s going on.  If you call them and tell them you are working with your insurance company trying to get it paid, they will oftentimes put the account on a hold, meaning they will not send it off to a collection agency.  These holds do not last forever so continual communication is a must if you want your account to stay in good standing.

The important thing to remember is just because a claim is denied doesn’t me you can’t get it paid and the three most important things you can do to move forward is communicate, communicate, communicate.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.

Good Debt or Bad? Is there a Difference and Does it Matter?

“I can get no remedy against this consumption of the purse: borrowing only lingers and lingers it out, but the disease is incurable.” —Falstaff from Henry IV (pt 2); William Shakespeare.

A. Alliance is in the business of collecting ‘bad’ debt on behalf of our clients.  In fact we have become very good at it.  That is certainly making something good out of something bad.

In most cases, however, collecting a ‘bad debt’ from a customer of one of our clients is not a singular event.  In fact, a single debt we may collect is often only a small part of the larger piece of the ‘bad’ debt a person may owe to many other companies.  Thus the importance of credit scores as a bellwether of a person’s credit worthiness.  While increasingly under scrutiny, credit scoring is still an important tool for businesses to use when granting credit.  For all of us it is also very important that we understand what affects our credit score and how we can maintain a good one.

Importantly, debt in and of itself is not a bad thing.  Virtually all of us carry some debt, and those that don’t may not be managing their financial lives very well.  Debt is a financial tool. When used properly, and with intelligence, it can be a very powerful tool to build a very good life. Yet, every day we see the aftermath of ‘debt gone wild’ and the financial and personal carnage it can leave behind.

Writing for CNBC, Deborah Nason, in an article entitled “Plenty of confusion about good debt vs. bad debt” discusses key differences between the two.  Understanding the ins and outs of debt are critical to our financial health, and she points to the 2015 study by NerdWallet which reports the average U.S. household carries …” $15,310 in credit card debt and $132,086 in total debt.” And that is an AVERAGE household.

Many times debt problems are simply the result of consumers not understanding the cost of borrowing and how their borrowing costs can change unexpectedly over time.  For that matter many of us lack a basic understanding of the things that impact our credit score and good credit standing.

One goal she suggests is that we all strive to clearly understand what goes into our credit score and what we can do to optimize it.  One thing, in particular, is to know our credit limits.

Nason quotes certified financial planner Kathryn Hauer of Wilson David Investment Advisors as suggesting consumers keep their debt ratios (that is, debt to total available credit) to under 30 percent.  Even if you pay off your credit card debt each month, more than that can start to adversely affect your credit score.

She also quoted Shawn Tydlaska, CFP, founder and CEO of Ballast Point Financial Planning regarding some common misconceptions about what impacts our credit scores (quoting now):

  • Myth: You need to carry a balance on your credit card. The balance does not affect a credit score, but a healthy payment history does.
  • Myth: Checking your credit score will hurt your score. It is only the “hard” inquiries [e.g., applying for a new line of credit] that affect credit scores.
  • Myth: Your income affects your credit score. Income affects the ability to obtain a new line of credit or a favorable interest rate, not the FICO score.
  • Myth: Your spouse has good credit, so you don’t need to worry about yours. It is important to improve one’s own score, especially when applying for loans where both spouses’ credit is considered.
  • Myth: You don’t need a credit card. By not having a credit card, you don’t have any credit payment history.

So, ideally we should all maintain a healthy amount of ‘good’ debt and minimize the bad if for no other reason than it can help and even improve our financial health. However, poor or negligent understanding of credit limits, terms and conditions can lead to serious financial consequences.

Every day A. Alliance helps our clients maximize their financial health. Can we help you too?

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 13 years.

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Want to Ramp up Your Revenue? Insurance Claims Collection to the Rescue

Almost everyone has had to deal with the unsavory task of contesting a denied or rejected insurance claim.  Whether you are a consumer or a professional in the healthcare industry denied claims correlate directly with lost money.  For the consumer, it’s often an overwhelming task that leaves them scratching their heads, and for the healthcare professional it is a loss in the form of uncollected revenue.

It could go without saying, but losing out on money you’re entitled to is, for lack of a better word, troubling at the very least.  If left unchecked it could be devastating to your bottom line.

While denied insurance claims are undoubtedly a point of pain for consumers, our discussion today will focus on the impact these denied claims have on healthcare organizations.

Unfortunately, there is no one problem that can be blamed for the lost revenue created by rejected and denied insurance claims—If only it was that easy.  Truth be told, there are several contributing factors that can lead to substantial reductions in revenue if they are not addressed.

Contributing factors that lead to rejected claims include, but are not limited to the following: failure to verify insurance benefits/eligibility, coding errors, and unsubstantiated rejection of claims.  Yes, sometimes claims are rejected for no good reason at all.  Who would have thought? According to Healthcare Financial Management Association (HFMA) since ICD-10 implementation, coding denial rates have not changed significantly for inpatient claims. Unfortunately the same cannot be said about outpatient claims.  Estimates for coding errors result in a 15% reduction in bottom-line revenue, 15%! Additionally, private insurers reject somewhere between 7-15% of all claims.  If you’re dealing with Medicare, it gets worse—they reject about 22% of all claims.

Anyone who has spent time working with insurance claims knows there can be some serious obstacles that need to be climbed to achieve payments.  What can you do to increase payments?

Be vigilant at the registration desk.  As many as 60 percent of avoidable claim denials take place at registration. Collecting insurance information and checking on benefit eligibility is a big step in the right direction, but this is only one piece of the puzzle.

Timely filing is another part of the ongoing battle with insurance carriers.  Some insurers require filing within 90 days of service or it will be rejected. C’est la vie.  Once you get your claims filed in a timely manner, it is imperative to consistently and continually follow up on any and all rejected claims—for some insurance companies, the clock is still ticking; timely filing isn’t achieved until a clean (correct) claim is received. This effort will ensure that a small clerical error does not become a big error in the form of lost dollars.

We’ve discussed a few steps that can be taken to mitigate revenue that is lost from unpaid insurance claims.  We have not touched on the area that may be most troublesome across the industry—the lack of manpower.  In this day and age of budget-cuts and reduced workforce, there simply is not enough time in the day for many business offices to keep up with all denied insurance claims.

The good news is you are not alone out there.  A competent 3rd party agency can assist you in crossing the often times treacherous waters of insurance claims collection.  Whether you are having trouble with many phases of your process, or simply do not have the time to follow up on every claim, a 3rd party agency may be the resource you need to reduce that lost revenue. Another benefit of using a 3rd party is another pair of fresh eyes looking at your accounts .  Not only can these fresh eyes find errors, but can pick up trending.  Let’s say your billing department consistently makes the same error, believe it or not, this does happen.  Catching (and sharing!) a trending error like that can really accelerate your revenue cycle by eliminating those recurring mistakes.

Let someone else help with rejected claims and those countless calls to insurance companies.  Utilizing a cost-efficient 3rd party can free up two of your most precious resources, time and money.

I know you may be saying, “Great, one more vendor…”  The good news is that your collection agency may offer this as one of their services.  Look into it; you may be surprised by the help that is available to you.