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6 Reasons Health Insurance Didn’t Cover Your Medical Bill

If you’ve ever been shocked by the steep price of a medical bill or service that should have been covered by your insurance company, you’re not alone. In fact, the US Department of Labor estimates that 200 million health insurance claims are denied every year.

Understanding why health insurance claims are typically denied is key for managing your finances. By knowing what’s covered and what’s not, you can make the most of your benefits—and save money in the meantime.

Best of all, we’ve done all the work for you. Keep reading to find out the most common reasons why your insurance company didn’t pay the entire bill.

1. Provider Network Issues

Just because your physician accepts your insurance doesn’t mean you’re completely covered. When a doctor tells you that they “accept your insurance” it means that they will bill your insurance and accept payment, but it doesn’t mean that the doctor is in your network. And if you go outside the provider network, you can expect your insurer to deny the claim. After your appointment, the doctor’s office can “balance bill” you, which means that you will be charged the difference between what was billed and what your insurance paid. That’s because your provider hasn’t signed a network agreement with your insurance company. 

If you need prior authorization for a service to be performed by an out-of-network physician, your insurance company may deny the authorization but be willing to consider it if you choose a different healthcare provider.

2. Your Free Annual Examination Wasn’t Actually Free

The Affordable Care Act states that all annual physicals be provided at no cost to the policyholders—so why were you billed for yours? The truth, it turns out, lies in the fine print. If you visit your doctor for your free exam but have something else done that isn’t considered part of the free exam, the entire exam is billable. For example, if you go in for an annual exam but ask your doctor for an electrocardiogram test because you’re worried about heart disease, the exam can be billed as an examination with EKG testing, which is no longer free. Before asking for additional services during your free exam, check with your doctor that it won’t be billed as an exam with diagnosis.

3. Your Insurance Company Practices “Bundling”

In the medical world, “bundling” refers to a type of misunderstanding between your healthcare provider and your insurer. It occurs when a secondary procedure is considered to be part of a primary procedure. For example, If an incision is required before a certain surgery, a surgeon may consider the incision and the surgery as separate charges and bill them separately. The misunderstanding occurs, however, if your insurance company “bundles” the two procedures together and only pays out one claim. In this case, you would be left to pay for the bill for the incision claim. Each bundling case is unique because sometimes the insurance company is correct and sometimes the doctor is correct. These types of cases involve a fair amount of medical research, from the correct billing codes used to what occurred during the procedure, and the specialty’s standard billing practices. As a result, you may find it worthwhile to consult a medical billing professional who can help you resolve your bill. 

4. Your Claim Is Missing information

It’s common practice for an insurance company to request additional information from your doctor before paying a claim. However, if your provider does not give the information or it gets lost in processing at the insurance company, your claim may never be paid. This is where a bit of diligence may help you save significantly. Next time you receive a statement indicating that nothing was paid, follow up to ensure that your insurance company has received and processed all necessary information pertaining to your claim.

5. Your Hospitalization Was Incorrectly Classified

When you’re in need of immediate, emergency care, your status as a hospital patient is based on the level of care you need. You’ll be assigned to either one of two categories: observation status or inpatient status. Inpatient status refers to when you are in the hospital and need complex care, or for patients who require more than a day or two of care. On the other hand, if you’re placed in a bed but have a less likely need for longer-term care, observation status will most likely apply. If your health insurance refuses to pay for a hospital stay, the reason may have to do with a disagreement about the correct status of your hospitalization, rather than a disagreement about whether or not you actually needed the care. Sometimes, the hospital and your doctor may believe you should be admitted to inpatient status, while your insurer may say you should have been hospitalized in observation status. 

6. Your Insurer Questions the Medical Necessity of Your Care

If your claim or pre-authorization request has received a medical necessity denial, it may be because your insurer thinks you don’t really need the care your physician has recommended, whether it’s a test, treatment, or drug. In this situation, you’ll need to enlist the help of your healthcare provider. They’ll be able to communicate with your insurance company on your behalf, providing more necessary information about why you need the requested service. After all, for non-grandfathered health plans, the Affordable Care Act guarantees consumers the right to an internal and external appeals process. That means that by navigating the appeal process, you may be able to have your service approved. Alternatively, you may reach an arrangement that will allow you to retain coverage for care that will be appropriate for your situation.

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