Health Insurance Articles

Three Typical Reasons For Denial Of A Healh Insurance Claim

2010-08-03

The importance of health insurance coverage is readily apparent to most people in today's world. People will change jobs or go without luxuries because they want to have proper insurance coverage. With helath care costs rising, health insurance is a necessity, but sometimes medical bills are not paid even when people have insurance coverage. There are three typical reasons for the denial of a health insurance claim. Understanding these reasons can help a person avoid significant out-of-pocket expenses.

A major cause for claims being denied is billing and code error. These errors are simply inadvertent mistakes that could be caused by the doctor's office or hospital, a third party billing company or even the insurance company itself. The first thing to do when receiving notice of a denial of claim is to examine the bill for obvious errors. It is important to know which services were obtained at time of the billing and who administered these services or treatments. When a problem is identified, you will need to call the insurance company's claims department to explain the misinformation.

Another major reason for denial of insurance coverage is a claim that comes from an out-of-network provider. It is important to know which providers are in the network of health care professionals because these professionals have agreed upon prices with the insurance company beforehand. If an out-o- network provider was used by the insured party, then there are ways to appeal a claim denial. Some insurance companies have reversed decisions on appeal because of extraordinary circumstances, such as seeing someone outside network because of an emergency occurring while out of town. To avoid this happening, the insured should call the insurer for in-network referrals or ask for a written list of approved providers.

The final common basis for denial of claims is coverage limitations. These limitations could include reductions of coverage or treatment outside the range of coverage. The way to avoid this kind of claim denial is to read and understand the terms and conditions of coverage that health insurance companies provide to their clients and then stay within those boundaries. Some companies will not cover high-risk operations, such as organ transplants, or procedures that they consider to be medically unnecessary, such as cosmetic surgery. Appeals can be filed for even these denials because policy terms can often be open to various interpretations.

Basically, the three reasons for typical health insurance claim denials come from different sources. These reasons can be defeated by equipping insured persons with knowledge of their rights and an understanding of the limitations to their insurance coverage.