When a claim is processed by your insurance company, it’s usually paid as either in- or out-of-network, depending whether the provider has a contract with your insurer. If the provider is in-network, a payment is made based on an amount agreed upon in a contract between the provider and the insurance company. The provider agrees to write off the difference between the payment in the contract and the full amount billed for the service.
If the provider is out of network, there is no agreement to write off the difference, so the provider can bill the patient for the remaining charge. This is called “balance billing,” and it creates many opportunities for mistakes.
- The in-network provider not writing off the difference, therefore billing you for the higher amount. Many patients will pay this amount in error simply because the provider billed them for it.
- The insurance company paying the claim as out-of-network when the provider is actually contracted and is in the network.
- A large group of providers —The Mayo Clinic, for example — being in-network, but one provider within the group being out-of-network. If that’s the provider you happen to see, the claim may be paid out-of-network, and the required adjustment may not be made on your bill.
Because the current system of health care reimbursement in our country is fee-for-service, providers are paid for each and every service they provide, and claims may contain many codes that correspond with different procedures. Different types of procedures, such as hospital stays, well office visits, sick office visits, lab work, x-rays and surgical procedures, to name just a few, are paid in different ways. Therefore, all bills should be examined to evaluate whether the coded procedures were paid properly and if the resulting bill from the provider is accurate.
- Well and sick visits coded for the same day of service. Well visits are usually paid at 100 percent, while sick visits are first applied to your deductible. The resulting balance can be negotiated with the provider.
- Multiple services provided on the same day involving multiple providers may duplicate procedures being billed. These bills should be audited to be certain the service is not paid to more than one provider, which can result in duplicate bills to the patient.
Timely Filing Limits
As part of an agreement with insurance companies, claims must be filed within a set time frame for those claims to be considered for payment. If the claim is not submitted within the timely filing limit, the service provider must write off the entire charge.
- Bills from a provider that indicate your insurance company denied the claim, making you responsible for the entire charge. The Explanation of Benefit (EOB) for that claim should be closely examined to determine the reason the claim was denied so patient responsibility can be determined.
A non-covered charge is one that is not covered by a patient’s insurance policy, usually a procedure that is cosmetic, not medically necessary, or deemed experimental. All of these determinations may be appealed, but they may require significant medical and claims appeal knowledge.
The provider of the service has an obligation to inform you that a procedure may not be a covered benefit and should agree to assist you in the appeals process if the claim is denied.
- The provider not FULLY explaining that a procedure is experimental or a non-covered benefit. If that’s the case, the resulting bill can be negotiated and even written off.
The majority of medical billing errors are difficult to assess unless you have some expertise in this area. Because of the high frequency of errors in all areas of medical billing, it’s important that all insurance claims and resulting bills from providers be reviewed for errors. This review may result in additional payments from insurance companies and reduced bills from doctors, allowing you to keep more of your money!