What exactly is Health Insurance - Description & HOW IT OPERATES - PART Two

7. Out-of-Pocket Maximums

The reverse of coverage limits, this component applies to the insured’s maximum exposure for payment while the health insurance contract is in force. Once the out-of-pocket limit is reached, the insurance company pays all future covered costs up to the coverage limit - though copays and exclusions remain in effect.

For example, if your out-of-pocket maximum is $3,000 annually, once you pay that amount, the insurance company will pay 100% of any additional covered expenses, minus required copays. Read about Insurance POS, Building Insurance India and much more related to the same.

8. Provider Panels

One of the biggest ancillary benefits of having a health insurance policy is the schedule of discounted fee payments negotiated between the insurer and medical suppliers and providers. In some cases, the amount you pay for a covered treatment may be 30% to 40% less than the provider’s “usual and customary” fees.

For example, a service that would cost uninsured patients $1,000 could cost policyholders $300 to $400 or less. Each insurer negotiates a discount with providers based on the number of the insurer’s policyholders and the projected utilization of the provider’s services.

Physicians, hospitals, and other medical providers are categories as either “in-network” or “out-of-network.”

    In-Network. In-network practitioners provide the highest discounts. Insurance companies encourage policyholders to utilize in-network providers by covering all or a majority of these providers’ fees at negotiated rates. They may also reduce copays or coinsurance when policyholders use in-network providers.

    Out-of-Network. Practitioners and medical providers who have not negotiated a preferred rate or minimal discounts are designated out-of-network. If you use an out-of-network provider, you will typically pay higher fees than for similar services provided by an in-network service provider. You may also incur a increased copay and higher coinsurance percentage.

9. Preauthorization

Preauthorization is getting prior approval for a medical procedure or specialist visit. It ensures that the service or visit will be covered. Most insurers require preauthorization before agreeing to cover a visit to a specialist.

Preauthorization doesn’t guarantee a service will be covered. Instead, it confirms that the insurer intends to cover the service - pending review of the claim and determinating the service was necessary. Many non-critical treatments require preauthorizations. And it’s usually the policyholder’s responsibility to know if preauthorization is needd. Failure to get preauthorization can result in a claim denial.

Pay special attention to the preauthorization requirement when seeing a specialist at the recommendation of your primary physician. Many primary caregivers are in-network but may unknowingly refer patients to an out-of-network specialist. In such cases, the patient is penalized with a higher expense and may have the claim denied entirely.

10. Explanation of Benefits (EOB)

Insurers generally send an explanation of a medical claim’s payment after it’s adjudicated or approved. This explanation of benefits, or EOB, generally describes what was covered and what may have been excluded. It also outlines the final contracted fees for the service, the proportion of the fees paid by the insurance company (and the amount which remains the patient’s responsibility), and an explanation of how the various amounts were calculated.

Always review an EOB to determine whether the insurance company’s payment matches your understanding of the policy.

Appealing a Claim Decision

Most health insurers rely on older legacy information systems to review and make claim payments. These systems have been amended repeatedly over the years, so errors often occur. Some experts claim that errors occur in 8% to 10% of adjudicated declares.

To dispute an insurance company’s claim decision, use the following process:

    Contact the Insurer. Contact the insurance plan company at the phone number printed on the EOB. If you call, follow up your conversation in writing confirming what you understood and the action that will follow.

    Get Names and Contact Information for Anyone You Speak With. Make a note of the name, address, and phone number of anyone you talk with. Use these people’s names to personalize the conversation. It may help them see you as more than just another complaint and make them more willing to help you.

    Keep Good Records. Accurate documentation is essential when disputing a claim decision. Never rely on your memory alone. Insurers are generally large bureaucratic organizations with multiple levels of management. A good outcome could require weeks, or even months, to be completely settled, so make sure to document every step of the process.

    Don’t Give Up. Escalate your request to higher-ups if you run into a roadblock, a hostile representative, or a decision you disagree with. A letter to the president of the insurance provider and your state’s insurance commissioner will generate activity on your claim, but you should only use it as a last resort.

If and when an error occurs, keep in mind that the personnel at the insurance good company could be just as bewildered as you are. Being angry or belligerent won’t help you achieve the results you want.

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