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Medical Insurance Q&A


Medical insurance can be a headache for all those involved, from the patient to the provider. 

Depending on the type of insurance, depends on the amount of time one has to file a claim. It can range anywhere from 6 to 18 months depending on the policy. 
Most common is 6 months from the date of service. 

Patients must be fully aware of how their policy works. 

1) Verify before any procedure that the provider is contracted with your insurance company before a procedure is done. This will avoid any unexpected out of pocket 
expenses for the insured. 

2) Verify with your provider that they do have your correct insurance information, in order to file a claim in a timely manner. This will avoid back and forth calls and billings at a later date. 

3) Verify with your insurance company that the procedure in question is a covered benefit. Ask if a letter of medical necessity is needed. Just because you have insurance doesn’t mean your covered for all procedures. Some policies do carry exclusions. It’s best to find out before hand instead of getting hit with a bill later. 

Main reasons claims are delayed or denied

1) Inaccurate Coding--ICD-9 and CPT codes are giving for every disease and procedure by the American Medical Association. They are a Universal Language used by all providers, 
and insurance company. When correct codes for the diagnosis and procedure are inaccurate or don’t match the insurance company will pend the claim for further information 
from the provider. Therefore, delaying the payment of the claim. Everything is based off of the codes used for both diagnosis (IDC-9) and procedure (CPT) 
Every part of your body has a universal code in which the diagnosis (disease, condition) is based. Codes are assigned based on anatomy. 

EX: Brain Tumor --code 191 (neoplasm of the brain) however, since the brain is divided into many parts/sections the billing specialist needs to be more specific 
191.7 (191=malignant neoplasm of the brain .7=brain stem) again however the brain stem also has several sections therefore the proper code or way to bill would be to use 
the diagnosis code of 191.7 (4) neoplasm of the brain, brain stem, pons (sections of the brainstem) Therefore the analyst processing the claim wouldn't have questions. 
However, more then likely will pend the claim for medical records to verify.

In most cases in order for the doctors to reach that diagnosis they will perform an MRI or test based on your symptoms. The MRI procedure code (CPT) 70551, however, 
there are also other codes that can be used based on if the patient has the MRI with or without contrast therefore requiring different codes. 
So the DX code is 191.7 (4) and the procedure is 70551 (without contrast). Therefore the procedure code matches the diagnosis code. 
Now say the billing specialist transposed the number and used procedure code 07551 which is an invalid code. Therefore, the claim would be denied as invalid coding. 
Keying errors are the most common, and easily fixed. Call both your insurance company and provider to have it corrected. 

2) Incorrect patient information--These are usually do to information being keyed incorrectly by the billing specialist, common error. Some cases especially on family plans the 
specialist may bill for a male when the procedure codes are female specific. ICD-9 and CPT codes are also based off of gender, and age of the patient along with the anatomy. 
So, if it's billed under the male insured, not the female and the codes are specific to female patients the claim will again be denied for invalid coding since some procedures,
and diagnosis are gender specific 

3) If the providers do not correct the information or provide the insurance company with the information they need the claims will be denied, therefore leaving the insured fully 
responsible for payment.

Letter of Medical Necessity

In some cases the insurance company will request a letter of medical necessity for a procedure before they will approve possible payment on a claim. 

This is primarily based off the diagnosis (ICD-9)code, does the diagnosis warrant the procedure (CPT) code.
Or can another less expensive procedure/test be done with the same results. The provider needs to prove that the procedure is the best way to determine your course of treatment. If not then having the procedure done becomes your sole responsible for payment to the provider.  

Collection Agency

When your provider is contracted with an insurance company they are under law to accept payment for the allowed amount not the billed.

EX: You visit your doctor, he bills your insurance company $100.00 for the office visit.
Your insurance company say’s no that procedure is only worth $80.00. Then depending on the policy will pay a percentage of that $80.00 you are only responsible for the difference. Most major medical policies are 80/20. With an 80/20 policy and the allowed amount of $80.00 your insurance will pay $64.00 and you’ll be responsible for $16.00 totaling $80.00. The provider must write off the other $20.00 from the total billed of $100.00.

Most policy have co-pay’s which you are responsible for a co-pay amounts usually at the time of service, depending on the terms of your policy. So, if your co-pay for an office visit is $10.00 you pay that when you arrive. The provider bills your insurance company for the $100.00, again they allow $80.00, paid 80% or $64.00 you all ready paid $10.00 so the provider may bill you for the remaining $6.00 of the 20% which is your responsibility.  Co-pay amount vary depending on the policy. 

You may also have deductibles which are your full responsibility, prior to the insurance company paying for claims which can range in different amounts depending on the coverage and/or policy terms. If your deductibles are not met you will be responsible for the claim. 

This is where some collection agency’s come in. Some will go to the providers to get the other $20.00. That’s illegal, especially if they are contracted with your insurance company. However, if your insurance company does deny the claim the provider can then bill you whatever they want for that service. Which can then be in excess of the original $100.00 and become your total responsibility. 

Many people fear non payments being added to their credit reports, so they will pay whatever is billed. Please, verify the dates of service and/or the procedure. Also, verify with your insurance company that no other payment was made by them, and the claim and amount is really your responsibility. 

It is extremely important to understand your policy, and read your explanation or benefits (EOB) from your insurance company after a claim has been filed. Match it up with any and all bills you may receive from the provider and or collection companies. This will prevent any error or overpayments on your part that you are not responsible for. When in doubt always ask questions. 

There are many different types of insurance. 
Medicare--federally funded through your Social Security benefits usually for seniors and or disabled.
Medicaid--state funded for low income or disabled patients.
Major Medical--usually covered a wider range of services but also carries a higher deductible.
HMO (health maintenance organization)-- cover a wide range of plans but you must see an exclusively HMO provider
PPO (preferred provider organization)--you must get your care from the insurance company’s list of preferred providers. 
POS (point of service) combines elements from both HMO & PPO plans. You must choose a primary care physician you work with to coordinate your care. 

In network providers-- are providers contracted with your insurance company for your care.
Out of network providers--provider not on the insurance company’s list of in network providers. Seeing an out of network provider for your care means your are responsible for the bill. In some case your insurance may pay a portion of the charges depending on the circumstances for going out of network. 

One thing to always remember, you have a right to appeal any denied claim. Just because you receive a bill does not mean it is your responsibility. Make sure it was not a coding error on the providers end and or claims specialist. Also, just because your policy has exclusions doesn't mean those exclusions are not payable. 
There are exceptions to every rule. Always, always double check when you receive a bill from a collection agency. With insurance fraud, and Identity theft on the rise when in doubt always ask questions. It's better to be safe then sorry.  
Information provided by Annette McKeon (president aimee's army) Based on over 20 years experience in the medical insurance industry as a claims analyst, With a degree in medical insurances, coding, anatomy, and medical terminology.
If you should have any questions please feel free to contact Annette at [email protected]


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