Nobody wants to get into a fight with a health insurer, but it may be worth your while. A recent Government Accountability Office report found that more claims problems stemmed from annoying but often straightforward billing and eligibility issues than from disagreements over whether care was medically appropriate. What's more, the odds are about 50/50 that if you appeal an insurer's decision, you'll win.
When Natasha Friedus's son, Nofi, was born almost two years ago, her insurer refused to pay $1,500 of Friedus's $7,500 hospital bill because she hadn't gotten prior authorization for the hospital stay near her home in Seattle. The plan also sent a $600 bill to Nofi, because he'd neglected to inform the insurer that he'd be in the hospital for a few days. "Apparently he was supposed to call before being born," Friedus says.
The new mother spent hours on the phone trying to sort out the problem, but she got nowhere. Finally, someone suggested appealing the decision to the insurer and asking for retroactive approval for her hospital stay. That did the trick, says Friedus, even though the insurer had never informed her that she could appeal the bills.
Under the 2010 health law, the situation should improve. Health plans will be required to inform members that they can appeal disputed claims internally within the health plan as well as to an independent review organization not affiliated with the health plan.
Coding Is Everything
As anyone who has tried to decipher a health plan's "Explanation of Benefits" knows, coding is everything. That's where many errors occur, experts agree. If the CPT (Current Procedural Terminology) code that describes the medical service or test you received doesn't correspond to the ICD (International Statistical Classifications of Diseases) code that describes your diagnosis, your claim may well be denied, a decision that will probably be communicated via a "reason code" on your EOB.
Medical services aren't the only thing that must be in sync with the diagnosis: "The CPT code needs to correlate with age and sex and place of service as well," says Candice Butcher, head of Medical Billing Advocates of America, which helps consumers resolve medical billing problems. In other words, if the CPT code is for a routine physical for an adult, but the patient is a 10-year-old child, the claim will be denied, says Butcher.
Sometimes claims that appear to be denied because the treatment isn't appropriate -- a particular service isn't considered "medically necessary," for example, or is deemed "experimental or investigational" -- are actually coding errors, say experts, because the diagnosis code is wrong, for example.
You can't prevent providers from miscoding your care or insurers from misinterpreting your plan or eligibility, but you can ask your doctor or insurer to cross-reference the treatment with the diagnosis and make sure the two are in sync, says Nancy Davenport-Ennis, chief executive of the Patient Advocate Foundation, which works to resolve these and other problems with health insurance claims.
Phone Calls Didn't Work
Sometimes even seemingly straightforward billing problems take months to resolve. When Janet Wolfe was hospitalized in central Georgia following a diagnosis of lymphoma a few years ago, she received a $1,600 bill from the insurer because she had stayed in a private room, which their insurer would pay for only if there were no other options. The hospital had only private rooms, but despite numerous phone calls by her husband, Andrew, to try to sort out the problem, the insurer eventually sent the bill to a collection agency.
When the letter from the collection agency arrived, Andrew took it and drove to the hospital. He demanded to see someone who could address the issue. Eventually, with the help of the hospital's chief financial officer, the insurer removed the charges. "No one was taking responsibility for fixing the problem," he says.
Such experiences illustrate the difficulty that people with serious illnesses may face when trying to manage their medical bills, says Stephen Finan, senior director of policy at the American Cancer Society's Cancer Action Network. Having a family member or someone else to backstop the process is essential. "If [patients] get lost or overwhelmed, there's someone else who can help them with this critical process," he says.
Organizations such as the Patient Advocate Foundation are not the only sources of assistance: The new health law provided $30 million for state-based consumer assistance programs to help people appeal health plan decisions.
Claim denial rates vary significantly by insurer, according to the GAO report. In California, for example, the denial rate for six managed care insurers ranged from 6 percent to 40 percent in 2009. Whether you're insured by a plan that kicks out many claims or only a few, it may pay to appeal. The study found that consumers were successful in appeals filed with insurers in 39 percent to 59 percent of cases. When they appealed to an independent reviewer, consumers prevailed roughly 40 percent of the time.
Before you file an appeal, talk with your insurer to understand why your claim was denied, says Cheryl Fish-Parcham, deputy director of health policy at Families USA, a patient advocacy organization. "The biggest mistake people make is that they write an appeal that doesn't really address the reason for the denial," she says.