Fight for Your Rights: Health Insurance Claims
It pays to face up to big insurance companies.
By Dan Caplinger, Motley Fool; MSNBC.com ~ Jan 25, 2007

One of the biggest concerns among those trying to plan their financial lives is having adequate protection against the high costs of medical care. Many people go to great lengths just to obtain health insurance, such as working at jobs outside their chosen profession or accepting low-paying work that makes them eligible for employee benefits. Because the costs of individual health insurance policies are often prohibitively high, these decisions make economic sense, but they're not always the most desirable choices from a personal perspective.

Just because you've gotten good health insurance, that doesn't mean you never have to worry about medical costs again. Like any other insurance company, health insurance providers may deny claims if your policy doesn't cover a particular procedure or type of care. While a recent study shows that some private insurers, such as Aetna (NYSE: AET) and Humana (NYSE: HUM), pay claims relatively quickly, they still have higher rates of denials than do government programs such as Medicare. If your claim is denied, you need to do a number of things to fight the denial and give yourself the best chance of getting your claim paid.

Know your policy
The first step in getting the coverage you deserve is to understand as much as you can about what types of medical services your policy covers. Even the best health insurance policies don't provide unlimited coverage for every conceivable medical need. Furthermore, most policies have substantial limitations and restrictions on benefits for a wide range of conditions, and many also require you to follow certain rules and procedures to make claims. Without carefully reviewing your policy, you may mistakenly assume that your insurance will pay the costs for the medical care you need even if the policy explicitly excludes coverage.

The best time to acquaint yourself with your health insurance policy is when you first get coverage. It's easy to procrastinate until you need medical care, but you won't be at your best once you're ill or injured, and digging through insurance documents probably isn't how you want to spend your recovery time.

Follow the rules
Even though many of the procedures that insurance companies require you to follow are cumbersome, it pays to follow them as much as you can. In some cases, insurance companies require that you get pre-approval on certain types of medical care before the care begins. If your doctor advises a particular course of treatment for a medical problem, get in touch with your insurance company before proceeding with the treatment, to make sure that you follow the required guidelines.

However, if you fail to follow the correct procedures, you shouldn't give up. While not going by the book may make things more complicated, you can still work to get your claim accepted.

Work with your doctor
When you need medical care, you often rely on your doctor to make an appropriate diagnosis and suggest a course of action. It's tempting to extend that reliance to health insurance issues as well. After all, since your doctor deals with health insurance all the time, you may fairly assume that he or she knows more about it than you do.

However, with all of the different types of insurance available, you simply can't depend on your doctor's ability to know what every single type of policy will or won't cover. The increasing complexity of procedures on health insurance claims has led many doctors to hire full-time staff members whose sole responsibility is processing such claims. Ultimately, you're responsible for understanding how your insurance works.

On the other hand, there are times when you'll be able to work with your doctor to ensure that your insurance will cover your medical costs. In some cases, whether you have coverage will depend on how your doctor diagnoses your medical condition. By telling your doctor what's covered and what's not, you may get the diagnosis you need so as to get your claim paid.

Dealing with denial
Despite your best efforts, your insurance company may deny your claim. The first thing to do is to review what your insurer sends you, along with your medical bills, in search of erroneous charges or incorrect coding of expenses. If your denial letter doesn't clearly state the company's reason for denying your claim, call your insurer and have the company explain it. Keep records of who you spoke with and what was said. In many cases, your insurer may be willing to correct a simple mistake without much work.

If, however, you find no such errors and the denial appears to be for a valid reason, you should request a formal appeal from your insurance company. Each company has slightly different rules for appeals, but many have fixed deadlines, so don't delay if you choose to file an appeal.

If you lose your appeal, some state governments provide additional oversight over health insurance plans. Check with your state's insurance department to get additional assistance with your claims process. You may be able to obtain an independent review of the merits of your claim by people outside your insurance company. If you have coverage through your employer, you can also check with your state's labor or workforce department to see whether they offer a separate appeals process.

Given the difficulty that many health professionals have in navigating their way through the vagaries of health insurance, you shouldn't feel bad if you don't immediately understand everything about your policy. The main point, however, is that because you're paying for your health insurance coverage, you should get everything you're entitled to receive. Although that doesn't mean your insurance company will pay every single medical expense, it's usually worth the time and effort to stand up and fight if your insurer unfairly denies a legitimate claim.

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