Dealing With Health Insurance Company Denials For Pre-Approval and "Out of Network"
Often patients are denied treatments and medical equipment due to erroneous reasoning by the initial examiner. The patient is in an unfair position due to:
1. Patient may be in pain, suffering or sick at the time of the request,
2. Patient does not routinely file for insurance benefits,
3. Patient's area of expertise is outside the health care world and the patient depends upon the knowledge of those employed to serve in the patient's best interest, not the employers sole interest.
Here are a few of the guidelines to understand when dealing with insurance companies:
1. Pre-authorization versus Pre-determination
Often an insurance employee will routinely deny treatment or durable medical equipment using the phrase " the treatment, equipment was not pre-authorized therefore we deny payment".
Pre-authorizations are NOT LEGALLY BINDING but can be intimidating when a patient first hears it. Now if the denial is based upon Pre-determination then that can be binding but it also is a binding commitment to "PAY A PARTICULAR AMOUNT OF MONEY FOR A PARTICULAR CODE OR PIECE OF EQUIPMENT". The issue for pre-determination is not coverage, but amount to pay for the coverage contracted for.
2. Words are not legally binding from the insurance carrier.
Basically if you do not have it in writing then it digresses to "he said, she said" and is not provable or binding. The best policy is to put all dealings in writing and/or summarize any conversations in writing and send by certified mail to the insurance company, certified mail, to the person you spoke with. If the person you speak with does not provide name or mailing address then note in the written correspondence being sent to the insurance carrier.
3. There are many laws to protect patients, with ERISA being the strongest, but there are also conflicts between whether state or federal law applies.
Federal law applies to self insured plans and State law applies to fully insured plans. If State law is applicable then you generally apply the law of the state in which the insurer has it's principal
place of business, where incorporated, and where the patient resides, or where the injury/accident occurred.
4. Regulatory laws initiated by specific legislative bodies require compliance.
Most states and the federal government have granted authority to regulatory bodies to set rules, rates, compensation to institutions such as Industrial Commissions, Worker's Compensation etc. and the rules of those bodies apply to patents and insurance companies alike.
The right to sell insurance in the particular state or federal regulatory body involves the granting of permission to do so which also includes certain contractual rights and obligations in dealing with patients.
5. Often a basic denial will be "Out of Network".
The insurance companies are obligated to provide patients with competent medical providers, not the best medical provider. If the company, hospital, clinic you want to use are accentuated that is a prima facie case of allowance if the services are not reasonably available within the network the insurance carrier chooses.
If the use of one insurance provider that is in network constitutes an unreasonable burden then the patient may request an exception due to X,Y,Z. If there is no provider in network that provides the same or reasonably same products/services then out of network providers must be approved.
If the patient has visited, or examined the proposed in network provider and does not feel the provider is qualified or competent then that argument should be used in requesting an alternate out of network provider.
6. Insurance law is based upon contract law.
If the patient, employer has met the contract requirements for coverage such as payment of premium then the insurance company is obligated to perform it's contractual obligations within a scope of reasonableness.
The contract is based upon law, not upon internal rulings within the insurance company by employees not versed in interpretation of contract law. Often routine templates are taught to the insurance examiner as template for denials of coverage but those templates are not legally enforceable.