Navigating the Health Claim Maze

The second half of getting sick is fussing with the health insurance claims process. I have some tips to pass-on from my own health claims experiences that might help you navigate this maze. Since I also sell health insurance, my understanding of the process and structure gives me an added perspective. This is not a rant on health insurance business or healthcare – just some techniques that can be helpful.

I am way too experienced in running the Health Claim Maze. Unfortunately, I lost my older brother to cancer last year and as his friend, and later executor, had the task of helping on the insurance issues.

First the Good News

I have always gotten the right answer eventually from every health insurance company on every health claim I have dealt with. Each and every insurance company honored their insurance policy and correctly paid what was due (or had a valid reason to decline a claim). Most claims were handled correctly and timely without any intervention.

This included the Kansas Health Insurance Association (the Kansas health insurance risk pool) which paid over $500,000 for my brother’s lymphoma treatments over his two year illness. It gave him access to any treatments that were appropriate. The final cost to him, in addition to his monthly premium, was his deductible and cost sharing of $3000 for each of the two years ($6000 total).

The core value of any health insurance plan is offsetting the huge financial risk of a major illness or injury and getting you access to the treatment you need.

Choosing the Right Insurance Company

Claims service matters. Unfortunately, most folks select insurance companies based on price and not value. An important value to consider is the ease of getting help if you have a claim.

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Look for an insurance company that has kept their claims call center in the United States. Nothing will make the claims process more frustrating than trying to get help on a complex health claim over a bad phone connection with someone who is talking a different version of English. Avoid any insurance company that has chosen the cheap off-shore claims helpline strategy.

Second, ask around about the claims service reputation of an insurance company. This is a good question for your insurance agent. Some insurance companies focus on making the claims process easier while others only offer only adequate service. It is worth paying more and getting the quality service.

Organization Matters

Setup a filing system to keep all claim benefit paperwork. Since the annual insurance deductible follows the calendar year, it is helpful to sort any claims “Explanation of Benefits” by the year the healthcare service was rendered. At the very least, have a box or file to toss any health insurance paperwork – keep it all. You will need this paper trail if a major health claim problem erupts.

If you are dealing with a major illness with a high volume of claims documents you will need a more advanced filing concept. For my brother, I had three files for each year: 1. Paid Claims; 2. Claims in Process; 3. Claims being appealed. I also stapled any unpaid healthcare provider invoice or appeal letter with the claims documents. Within these files, all claims paperwork was sorted by date of service. With pounds of claim’s documents generated by my brother’s illness, organization of the paperwork was very important.

The Contract / Sales Booklet

Always keep in your file the actual health insurance contract and the detailed sales booklet. The sales booklet is much more accessible and a good starting point to understanding your benefits. I purposely send the detailed booklet to each of my clients when they apply for insurance. The contract is what the health insurance company is obligated to do in exchange for your premiums and is the final word on any dispute.

Troubleshooting the Maze

Most health insurance claims are automatically (particularly if you are “in network” with your healthcare providers) and correctly handled. With any organization, even if well intended and well run (I count most health insurance companies in this category), balls are still going to get dropped and mistakes will happen. Always treat the claims representatives politely (my wife’s very wise advice) and enlist them as allies.

Here are three primary claims problems with troubleshooting techniques that I have used:

Problem #1: Claim Denied

Health claims are often denied for minor technical reasons. Don’t panic. You have work to do.

First Action: Call the Insurance Company’s claims office and ask for an explanation. Why was the claim not paid? Often it is a simple problem that can be quickly corrected.

For example: a client that had a hospitalization ($45,000 three day hospital visit due to a heart rhythm problem), but had the claim initially declined by the insurance company. A phone call to the insurance company revealed they needed a detailed bill to process the claim but the hospital had only sent a summary bill. This was quickly resolved with a second call to the hospital. A payment for the claim (less policy deductible) was quickly sent.

Second Action: Appeal the Claim. You will see on any “Explanation of Benefits” a procedure to appeal any claim that has been denied. Follow this path (normally a mailed letter). Keep a copy of everything. You need to appeal within a limited time period. I made it a policy with my brother’s claims to appeal the same day I received any Explanation of Benefits that did not pay the claim. Always send an appeal by certified mail to establish the date the appeal was made and who it was sent to. An appeal forces a higher level of assessment and typically shifts the claim to a special claims appeal review department.