Question
What is the name of your state? NJ
This is in reference to my wife’s medical bills. Sometime around the month of December 2005, my wife was diagnosed with an ailment and was given topical medication as per the doctors advice. Later in the month of February of 2006, on another visit to the doctor, she was informed about the severity of the situation and was suggested to be operated immediately.
Now, the insurance company requires that a pre-approval be taken from them before any sort of operation is done to make sure the insurance will cover it. So this step was done before the operation on February 28th 2006 and everything seemed fine. Now, after the operation the bill was directly sent by the hospital and others to the insurance company, they have denied it.
The reason given is that the condition was pre-existing. The total of all bills comes up to approximately $15,000 and my concern is that it has been known to the insurance company that this case was already being treated since December and that it has been accounted for. This huge sum seems unfair to us as we did hold insurance at that time of surgery. I truly hope that this is considered and I get some assistance in regards to this matter. I will be glad to provide whatever documentation or information necessary toward this case.
Thank youWhat is the name of your state?
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Step 1: Get all the facts first so you know what you're fighting.--Call the insurance company and ask what was the condition specifically they are deeming pre-existing. Find out the diagnosis codes they are denying of the codes used to bill. Did your insurance have a pre-existing clause, and you haven't been with this insurance company long enough?
Also, do you have the operators name and an approval number for the surgery? If the problem is not pre-existing, you can probably get around this. Have hospital notes AND the note from the primary physician referring the surgery been obtained? Has the insurance company seen the notes? When the hospital billed, did they give your wife's condition an onset date that would trigger a pre-existing condition? Are you sure it's not just pending a pre-existing investigation, and not really denied yet? There are many questions you need answers to.
Is this an HMO policy? Get armed with this info and present your insurance company with this. You will probably have to go through their appeals process.
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Which insurance company is this? I ask because the referral/approval process is different for some companies. There is one particular insurance company who lately seems to be going back months and even years, and "unapproving" procedures thay initially approved and paid for.
As JobHunting said, gather all your information, including the name of the person obtaining the approval from the insurance company. I can assure you that one of the questions that had to be answered before they gave the initial approval was whether it was a pre-existing condition. They would have required office notes. Get your Doctors involved. They want to be paid and most likely, they were initially paid and now the insurance company is debiting the claims of other patients to assure they're paid back immediately. There's no sweeter sound than an angry Doc yelling at the medical director of an HMO.
There's always the chance if, as you say, the Doctor recommended surgery immediately, that it was initially deemed emergent and, by law, they must give approval. They may later review the information submitted for payment and decided it was not life threatening and retro-actively denied the claim. It rots and it's not fair, but it does happen.
Good luck to you!
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The disclaimer you will get from EVERY insurance company is this:
PRE APPROVAL IS NOT A GUARANTEE OF PAYMENT.
It means that the procedure meets the criteria to be considered medically necessary. It is not required to prove that coverage exists, either for the patient, the procedure, or the condition, before preauthorization is given. The person approving the service is not required to investigate whether the condition was pre-existing prior to giving approval, that is not part of the process. So the insurance company was still within its rights to deny the claim and you are responsible for the bills.
IF the condition was not pre-existing, then gather your proof and appeal the denial. But if it was and they were correct, then you will have to pay the bills. It is your responsibility (everyone's responsibility) to understand how your coverage works and what the restrictions are.
Answer
The disclaimer you will get from EVERY insurance company is this:
PRE APPROVAL IS NOT A GUARANTEE OF PAYMENT.
It means that the procedure meets the criteria to be considered medically necessary. It is not required to prove that coverage exists, either for the patient, the procedure, or the condition, before preauthorization is given. The person approving the service is not required to investigate whether the condition was pre-existing prior to giving approval, that is not part of the process. So the insurance company was still within its rights to deny the claim and you are responsible for the bills. Also, we are obliged to "fully inform" the patient of the cost both with and without their insurance company's "approval"
IF the condition was not pre-existing, then gather your proof and appeal the denial. But if it was and they were correct, then you will have to pay the bills. It is your responsibility (everyone's responsibility) to understand how your coverage works and what the restrictions are.
"Not a guarantee of approval" is usually what you hear from reps and recordings when seeking benefits and eligibility information. When specific diagnostic testing (CT, MRI, PET scans), surgery or procedures are involved, getting approval from the insurance company is both for their interpretation of "medical necessity" as well as payment. I thought the whole point of quality asurance was for the QA Nurse/Medical Director to review the records then make the decision for approval (or not) of the procedure/surgery, etc. I mean why spend my time submitting office notes and spending endless time on the phone with QA people trying to get approval for payment if the payment can be retro-actively denied? Unless it's a emergency situation, I can't imagine surgeons doing the surgery, or risking the liability, if they are guaranteed payment.
"Approval" by the insurance company to have the procedure/surgery done is also "approval" for payment unless, of course, there is a large deductible involved.
In any event, you are right, the consumer needs to read their policy information and understand their coverage. If they have questions, they need to get the answers IN WRITING from their insurance plan.
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Every insurance company I have ever worked for (which has been 3 different companies, 2 huge national corporations and one small local provider of Medicaid, total of about 7 years in the health insurance industry), and every insurance that I have ever personally had (which would include 2 or 3 more companies) have all used that disclaimer. When the doctor gets the preauth info, that will be right on there.
Prior authorization is ONLY intended to address the medical necessity criteria. It is NEVER intended to substitute for verification that coverage exists or to account for pre-existing limitations or other plan-specific exclusions. Say you are scheduled for surgery on 10/15 and you get the authorization now. Then you get fired from your job and your coverage terminates as of 9/30. Your insurance is NOT obligated to pay for the service occurring after termination of coverage just because they pre-authorized it. There are many factors that are taken into account when determining whether to pay or deny a claim. The prior authorization/medical necessity requirement is only one of them. The nurse reviewing the notes for preauth is NOT obligated to review ANY of the other requirements that are involved in the payment decision. That is what the claims processor does.
They are not retroactively denying anything either. The preauth still exists and is still valid, they're not denying for lack of medical necessity or failure to preauth. They're denying because of pre-existing exclusion (which the insured should have been aware of before she had the procedure), or they're denying because no coverage exists, or some other reason that has nothing to do with the preauth, and that is their right so long as they are adhering to the terms of the insured's policy.
Lea it seems that you work for a doctor's office in the billing department right? I have to tell you that your experience seems very limited and you only partially understand how insurance companies work. Payment is NEVER guaranteed until the check is actually cut. And even then, there are sometimes takebacks due to errors. If insurance denies, unless it's a contractual write-off, the patient becomes personally liable for the bills, that's why doctors require you to sign a form stating that you will be responsible for payment if your insurance denies.
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Every insurance company I have ever worked for (which has been 3 different companies, 2 huge national corporations and one small local provider of Medicaid, total of about 7 years in the health insurance industry), and every insurance that I have ever personally had (which would include 2 or 3 more companies) have all used that disclaimer. When the doctor gets the preauth info, that will be right on there.
Prior authorization is ONLY intended to address the medical necessity criteria. It is NEVER intended to substitute for verification that coverage exists or to account for pre-existing limitations or other plan-specific exclusions. Say you are scheduled for surgery on 10/15 and you get the authorization now. Then you get fired from your job and your coverage terminates as of 9/30. Your insurance is NOT obligated to pay for the service occurring after termination of coverage just because they pre-authorized it. There are many factors that are taken into account when determining whether to pay or deny a claim. The prior authorization/medical necessity requirement is only one of them. The nurse reviewing the notes for preauth is NOT obligated to review ANY of the other requirements that are involved in the payment decision. That is what the claims processor does.
They are not retroactively denying anything either. The preauth still exists and is still valid, they're not denying for lack of medical necessity or failure to preauth. They're denying because of pre-existing exclusion (which the insured should have been aware of before she had the procedure), or they're denying because no coverage exists, or some other reason that has nothing to do with the preauth, and that is their right so long as they are adhering to the terms of the insured's policy.
Lea it seems that you work for a doctor's office in the billing department right? I have to tell you that your experience seems very limited and you only partially understand how insurance companies work. Payment is NEVER guaranteed until the check is actually cut. And even then, there are sometimes takebacks due to errors. If insurance denies, unless it's a contractual write-off, the patient becomes personally liable for the bills, that's why doctors require you to sign a form stating that you will be responsible for payment if your insurance denies.
No, actually, I do not work in the billing department. I am an RN, BS with 20-some odd years of experience in Child Psych and for the last 11 years, part owner of this practice. So, I've had to learn about all aspects of owning a business.
I am very familiar with our billing department and meet with them daily. I also sit on the phone for long periods of time attempting to get insurance company representatives, whose knowledge about medical issues are only as involved as their flip cards will allow them to be, to understand what a "medical necessity" really is, including one who asked me what part of the body a cranial MRI is for!! I've fought with insurance companies who believe you can "cure" a child with schizophrenia in 7 visits. I have seen our reimbursement slashed by some phantom who "negotiates" ridiculously low fees, then must justify those fees by sending them copious amounts of paperwork I doubt they undertand.
I do understand that there is a section on the patient registration form stating patients are ultimately liable for their bills and believe you can find that advice, where appropriate, in my posts.
I, of course, agree that if the coverage ended due to the patient being fired or quit their job before the service was provided, then it shouldn't be covered, regardless of authorizations, unless they've COBRA'd. We verify coverage each time a patient comes in to minimize errors.
Thank you for your added insight, though, I appreciate the education. There's a lot to learn. Have a good weekend.
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Hey I never said that insurance determinations about medical necessity/granting preauth are always correct! That wasn't the subject of the post. Just that the scope of preauth ONLY concerns the medical necessity requirements and not other aspects of claim eligibility.
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Let's get back to the original subject of the OP. . .
Health insurance premiums in New Jersey are very expensive. Therefore some very smart people opt to go uninsured since NJ forces insurers to guarantee the issue of individual health insurance. While most NJ residents understand that no one can be turned down upon application for health coverage, many do not understand that a pre-existing condition provision exists. Pre-existing condition provisions exist to protect the insurer issuing the guaranteed coverage from applicants who elect to purchase insurance coverage only after a disease has manifested itself or they are diagnosed with a particular medical condition requiring treatment.
The premise of health insurance is really no different than any other insurance. You pay premiums to an insurer to indemnify yourself (family) against unknown conditions that may occur in the future. Most people understand one cannot by car insurance to cover accident damage after a car accident, or homeowners insurance to cover fire damage after a fire, or life insurance on someone's life after death.
Health insurance is no different. While I'm sure it's true as the OP states, "This huge sum seems unfair to us as we did hold insurance at that time of surgery," they likely did not 'hold' the insurance at the time they sought treatment for the insured's medical condition as it already manifested itself, or was subsequently diagnosed. At that point it is too late to expect coverage for that condition as it will almost always be deemed 'pre-existing'. I suspect that is the case in this post and that is how some very smart people get caught in a very expensive situation when they elect to go uninsured for any period of time.
If this is indeed what occurred I doubt there is anything the OP can do to force reconsideration of the claim. I would advise the OP to continue paying the insurance premiums as the ‘pre-ex’ period is limited and other medical conditions may be covered that are not deemed pre-existing.
KTL
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As I said, the only way OP could appeal would be if the condition was NOT preexisting and he can prove it.
And again, it was his wife's responsibility to know the provisions of her plan before consenting to the procedure.
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The poster MUST ask the insurance company to specify what condition are they considering as being pre-existing, when was that specific condition diagnosed and who diagnosed it. If they can't answer those questions and prove to the poster that their denial is justified, then I would fight their denial with fervor. I suspect the poster may know the answer already.
And as far as pre-auth, it is a fact that it is only a confirmation of medical necessity and not a guarantee of payment.