Typically, health insurance companies reimburse the medical bills of an insured person who falls ill or require some medical service. However, sometimes these medical claims are denied for various reasons. To determine the legitimacy of the claim, insurers usually rely on a comprehensive medical claims review. When a claim is denied, the insurance company is required to provide a written explanation of the denial. The procedure of appealing to restore the insurance coverage must be included in the explanation. The time to appeal against the denial is also limited.
Here are some common reasons for insurance claim denials.
- No Referral on File: Some insurers require the insured patient to provide a referral from their family doctor along with the claim. If it is not provided, the claim may be denied.
- Insurer not Informed on Time: The claim should be filed quickly and within the deadline. If it is not, the insurer may deny the claim. Different insurers have different policies regarding the steps to take if the deadline is missed.
- Not Obtaining Pre-Certification or Authorization: It is essential to know whether the insurance companies require prior authorization or pre-certification for the particular treatment.
- Errors in the Claim Form: Simple clerical errors could lead to claim rejections or denials. These include the patient’s name being misspelled, error in entering the ID number, incorrect diagnosis and/or procedure codes.
- Lack of Medical Necessity: Insurers may not cover a medical service that they believe is medically unnecessary.
- Out-of-Network Provider: Insurer networks could change from one year to another. Patients may not realize this. Patients may also be unaware of the fact that changing insurance companies could also change which medical providers they can see and receive full coverage. Providers must therefore ascertain patient insurer information during the appointment scheduling or registration.
- More than one Healthcare Plan: If a person has more than one insurance plan, it may lead to claim denial. To avoid such concerns, it is important to categorize the companies as primary, secondary of tertiary.
- Services that are not Covered: Insurers may not provide coverage for certain diseases or health conditions. If the medical claim is submitted for such conditions and their treatment, it could face denial.
- The sum Insured Limit is Exhausted: The sum insured is the maximum amount of claim that the insured person can make on his policy in a year. If multiple claims are filed within one year, it is possible that the sum insured limit is exhausted. Any claim filed after that will be rejected. To avoid such situations, it is best to top-up the sum insured by paying an extra premium.
- Irregularity in Paperwork: When a health insurance claim is submitted to an insurer, the candidate must submit important documents such as doctor’s prescription, hospital bills, invoices for medicine and so on. In the absence of such documents, the insurance company may deny the claim. Also, if there is any discrepancy perceived in the claim form and the documents submitted, the claim may not be reimbursed.
- Costs Excluded by the Health Insurance Policy: In such cases, the claim could be rejected by the insurer. Before filing a claim, the applicant must understand the inclusions and exclusions mentioned in the policy document.
A health insurance company rejects or denies a medical claim when accurate billing information is not found in the medical claim. Insurance attorneys and insurers utilize medical claim review services to determine whether a medical claim is valid. In the case of a rejected /denied claim, the insured person may receive the medical payment once the required information is provided to the insurer and the claim resubmitted. A claim is denied when the insured person is not eligible for the medical coverage.
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