Thursday, August 9, 2012

The Affordable Care Act and Rejected Insurance Claims

The Huffington Post recently ran an article about a cancer patient whose claim was denied because he had exhausted his lifetime limit of $300,000 for coverage.  AETNA Insurance initially denied the claim, but agreed to pay after significant pressures from the patient who initiated an online campaign.  The article, linked below, continues to point out the absurdities in dealing with health insurance companies who reject millions of dollars of claims annually.  In many cases, these claims are rejected erroneously and cost the patient dearly, both emotionally and financially.

The report clearly addresses the lifetime maximum coverage benefit exhausted. Fortunately, this will no longer be a reason for insurance companies to reject future claims because one of the key components  of The Affordable Care Act (ObamaCare) is that it will be illegal for Insurance companies to place limitations on lifetime coverage by 2014.  No one thinks about these seemingly high limits until they actually get seriously sick and the bills quickly start adding up. With today's ever skyrocketing costs of medical care no limit is out of reach and no amount of personal wealth can be enough to cover all potential costs.

Actually, this provision already went into effect for existing health plans beginning on, or after, September 23, 2010. The complete timeline for the implementation of the Affordable Care Act for the Act's provisions through 2014 can be found by clicking here.

Insurance companies reject claims for a variety of reasons far too often. According to a recent American Medical Association (AMA) survey reported by its immediate past Chairman, Dr. Robert Wah, 20% of insurance claims were processed incorrectly in 2011. This is different from the simple rejected claims which do not fit under the patient's specific coverage. These falsely processed claims were inaccurately paid,  meaning the insurer frequently underpays, leaving the insured with a larger medical bill than they should have. 

The most recent Government Accounting Office (GAO) study on health insurance claims reveals that nearly 40% of claims from six large insurers operating in a single state were rejected. The study also reports that when these original denials were appealed, almost 60% were overturned in favor of the insured patient!

The lesson to learn here is to appeal any claim that is rejected, regardless of the reason. Odds are in your favor it will be overturned and that you're more covered than you thought.  Never accept the myriad of reasons why insurance companies reject your claims.  Always appeal!

Patients also need to be aware of why claims can be rejected and how to properly appeal these rejections.  In no particular order, the most common claim rejections arise from Pre-existing Conditions, Wrong Diagnosis Codes, Duplicate Claims Submission and Limited Benefits, such as mental health and those claims deemed "not medically necessary."

Let's take a look at each common claim rejection individually.

Pre-existing Conditions
Under ObamaCare coverage cannot be denied because of it. Previously, insurers could pick and choose who they can provide coverage for based on an applicant's medical history. No more. Thanks to President Obama everyone is now eligible for coverage.

Wrong Diagnosis Codes 
Typically, services are coded as "screening" or "diagnostic" and depending on the patient's history, these services may be paid under one, but not the other. It's not uncommon for your provider to miscode; either accidentally or due to poor knowledge of your history.

Duplicate Claims
This occurs when the insurance company feels that multiple services of the same kind took place on the same day.  While this may be the case, in most circumstances, patients should still verify from the provider that these "duplicate" services were ordered more than once for legitimate reasons and if so, should be reimbursed accordingly as separate services.  

Limited Benefits
In many instances this type of rejected claim is very difficult to appeal because the insured is contractually bound. Typically, mental health conditions do not receive the same kind of insurance treatment as other illnesses. All "diseases" are not looked upon equally. On occasion, insurance companies will make exceptions on a case by case basis, so do not be discouraged. With a little fight and help from your Doctor you can still appeal these rejections. Many states have already mandated mental health parity for Group enrollment. 

"Not Medically Necessary"
Any time a service is branded "unnecessary", patients should request from their Provider an authorized letter documenting the medical necessity for the service or treatment. 

Regardless of the positive initiatives of the Affordable Care Act YOU, THE PATIENT must still work to understand all your rights. Ask questions. Read articles. Follow this blog! You can be your own advocate. An informed, knowledgeable patient is the best way to maximize your entitled benefits and minimize your healthcare costs. 

Stay informed. Stay positive. Stay healthy.
-  The Patient's Advocate