Why Didn't My Insurance Cover My Hospital Bill
Few things are more stressful than receiving a hefty bill for medical care, especially when you think your insurance will cover it. Health insurance is intended to protect against high medical costs, yet many find themselves shocked when certain charges are left unpaid. In this article, we will explore this shared experience and know the reasons behind these gaps, prevent future surprises, and ensure you get the coverage you’re entitled to.
The purpose of health insurance for expats is to provide financial protection and help with the costs of medical services. However, having insurance doesn’t necessarily mean the insurance company will pay for everything. Coverage varies based on your insurance plan, and insurance companies assess claims to determine what they will pay for. According to the Kaiser Family Foundation and New York Times Medical Bills Survey, many patients face surprises when they see their hospital bills and realize that not all services are covered.
In 2012, the New York Department of Financial Services reviewed over 2,000 complaints related to surprise bills, finding that out-of-network emergency bills averaged $7,006, with insurers covering an average of $3,228, leaving consumers with $3,778 to pay for emergencies they couldn’t avoid. The study also revealed that 90% of surprise bills were from non-emergency services during hospital stays, often involving specialists like anesthesiologists, lab services, surgeons, and radiologists. Out-of-network assistant surgeons typically billed $13,914, with insurers paying only $1,794 on average, and radiologist bills averaged $5,406, of which insurers covered $2,497.
Understanding that "coverage" does not mean the insurance company will automatically "pay" for a service in full. Coverage might mean that your health plan helps reduce costs or provides discounts for services within the health plan’s network. As a patient, it’s essential to understand your specific coverage to avoid costly out-of-pocket costs when visiting a healthcare provider.
There are several reasons why an insurance plan may not cover certain medical services. Sometimes, it could simply be an administrative or billing error. Let’s explore the common reasons for claim denials and unpaid medical bills.
Insurance plans are designed with specific limitations, covering certain treatments while excluding others. For instance, elective surgeries like cosmetic procedures or alternative treatments like acupuncture may not be included in standard insurance policies. Even if these services benefit some, insurers often view them as non-essential or optional. Understanding the exclusions in a medical expense plan can help prevent surprises when you receive your bill.
Most insurance companies require that services be "medically necessary" before covering them. Insurance companies may deny the claim if medical providers do not submit the correct medical necessity documentation. Each insurer defines medical necessity differently, and what one company considers necessary, another may not.
Health plans restrict coverage to individuals officially listed under the policy, such as the policyholder or dependents like children or spouses. Suppose a child over the age limit still receives treatment under a parent's plan; in this case, the insurer may deny the claim due to the dependent’s age. Ensuring everyone seeking treatment is listed as a covered member can help prevent these denials.
When a patient has multiple insurance policies, the insurers follow a coordinated benefits process to determine which policy is the “primary.” For instance, if you are covered under your and your spouse’s insurance plan, the claim should be processed by your insurance first, with the spouse’s plan acting as secondary coverage. Submitting to the secondary insurer before the primary can lead to confusion and denial until the correct order is followed.
One of the most common reasons for high medical bills is receiving care from an out-of-network provider. Health insurance plans typically have a network of providers they work with, and costs for out-of-network providers may not be covered or may be significantly higher. Visiting out-of-network care providers often results in surprise medical bills because these facilities charge higher fees than in-network providers.
Every health insurance plan has out-of-pocket costs, such as deductibles, copayments, and coinsurance. Even when a service is covered, you may be responsible for some medical bills. Reviewing your health insurance plan terms can help clarify these expenses.
Classification errors, like coding a procedure as “outpatient” instead of “inpatient,” can lead to partial payment or denial of a claim. For instance, a patient admitted for overnight observation after surgery might have their stay coded as an outpatient, resulting in a denial of inpatient benefits. Clarifying the classification before or after the procedure can help prevent these errors from affecting coverage.
Medical billing relies on precise codes to describe each service provided, but mistakes in coding can lead to claim denials. A common issue is “bundling,” where multiple services are grouped and billed as one, which may reduce the amount paid by the insurer. Another example is when a diagnostic test is coded incorrectly, causing it to be denied as unnecessary. Ensuring accurate coding can prevent delays and denials.
Many insurance plans require a referral from a primary care physician or pre-approval from the insurer for certain treatments or specialist visits. Without this, the insurance company may refuse to pay for the service, viewing it as unauthorized. Before scheduling treatment, checking for referral or pre-approval requirements can help avoid unnecessary out-of-pocket costs.
Certain healthcare services are often excluded from standard insurance coverage, which can lead to unexpected expenses if not anticipated. Here are some common examples:
Cosmetic Procedures: Treatments solely for cosmetic enhancement, such as elective plastic surgeries, are typically not covered by insurance.
Alternative Therapies: Services like acupuncture, chiropractic care, and other alternative therapies often fall outside the scope of standard plans.
Experimental Treatments: Insurance companies usually avoid covering experimental treatments, as they may lack sufficient evidence of effectiveness.
Long-Term Care: Most plans do not include extended care, assisted living, or in-home support for chronic conditions.
Routine Dental or Vision Care: Routine services like checkups and corrective lenses are usually not covered unless a plan specifically includes dental or vision.
Understanding these exclusions can help you avoid surprise bills and ensure that you and your healthcare provider make informed decisions regarding your treatment options.
When your insurance company denies a claim, you have options for recourse. Here are steps you can take to address denied claims and unpaid hospital bills:
Start by reviewing your insurance claim to ensure all information is accurate. Errors in coding or billing can result in denials. Contact the healthcare provider if you find any discrepancies.
Go over your health insurance company policy to confirm what is covered and what isn’t. Familiarizing yourself with the specifics of your plan can help avoid surprises.
You have the right to appeal denied claims. Health insurance companies must provide an appeals process as part of their service. You may need to provide additional documentation or evidence to prove medical necessity. According to the Affordable Care Act (ACA), insurance companies must inform you of the steps to appeal a decision.
Sometimes a simple phone call to your health maintenance organization or insurance company can clarify the issue. Ask for a detailed explanation and reference any medical necessity your medical provider documented. Be sure to record your call, including the reference number provided.
Your insurance agent can help you navigate the appeals process and understand the benefits of your insurance plan.
If you have an employer-sponsored health insurance plan, consult your HR department. They may provide insight into your health plan and offer assistance with claim issues.
In certain cases, contacting a congressperson or state representative can pressure health insurance companies to resolve issues. This can be especially helpful if you feel your rights as a patient are not being honored.
Each state has a state insurance department or insurance commissioners who can investigate claims. The National Association of Insurance Commissioners (NAIC) provides resources to help connect consumers with these departments. This can be especially effective if you believe there was a misinterpretation of state or federal law.
Legal counsel can offer valuable advice if you face significant out-of-pocket costs or surprise medical bills due to a denied claim. In some cases, you may even have grounds for a lawsuit, particularly if the insurance company acted in bad faith.
Finally, public exposure may bring attention to denied claims, especially if they impact many people or highlight issues with insurance company policies. The No Surprises Act (NSA) has gained media attention for protecting patients from surprise medical bills. Additionally, financial assistance programs may be available to help cover high out-of-pocket costs if you’re facing a significant financial burden.
Encountering a denied insurance claim or an unexpected medical bill can be overwhelming, but understanding the reasons behind these issues can help you take the right steps to resolve them. Reviewing your health insurance plan, familiarizing yourself with your plan’s network, and learning the appeals process are essential steps for managing medical costs — including international student health insurance costs — and ensuring alignment between your healthcare provider and insurance company.
For those seeking clear answers and guidance through the complexities of health insurance coverage, explore our resources at WellAway. Our team is dedicated to helping you navigate the ins and outs of healthcare plans, empowering you to make informed decisions and avoid unexpected bills. Visit our official website to discover our international student health insurance plan and how we can help you achieve transparency and peace of mind with your health coverage.