Not so long ago, health care insurance was relatively simple and straightforward.  You either had insurance or you didn't and if you did you probably had a traditional 80/20 indemnity plan.  The average plan had a low annual deductible and paid 80% of your medical bills with a 20% co-pay.  You could see any doctor, as networks did not exist and tests were performed at the request of the doctor without having to get preapproval from your insurance carrier.  The days of handing the doctor your card and not having to concern yourself with the bill are long gone!  One just has to look at the size of their benefit plan book to get a sense of how complex this process has become.  Managed care was sold to the patients as a way to cut costs and to the medical providers as a way to reduce the cost of claims processing.  It's done neither and has created a mess that has enveloped all involved.  You need to educate yourself on how your insurance works in detail and take proactive steps to ensure that you get the coverage you and your family deserves.  Please note, the out of network information and examples below only pertain to cases that are not subject to State and Federal Surprise Bill Law mandates.

This is by far the most restrictive type of coverage with strict rules on who you can see and what needs to be done before you can see a specialist or have a test performed.  Most HMO plans use a primary care doctor as the gatekeeper and all services are scheduled through that doctor.  It's imperative that you have a good working relationship with that doctor's staff as they will be your best resource should you have a problem with the HMO carrier denying your bills.  Also, you need to read your policy booklet and the follow the rules as best as possible!  The booklet is usually written in mind numbing legalese similar to that of an auto lease or cell phone agreement and for that reason most people simply don't read them.  However it's rare to have a major problem that requires you to review those contracts after the fact for an auto or a cell phone but you will almost certainly use your medical insurance.  If you go outside the guidelines of your policy, even unknowingly, you do so at high financial risk as the carriers are very unforgiving in this area. 

Listed below are some of the problems that we see on a regular basis that cause people with managed care health insurance to end up in collection.

• DOCTOR LISTED AS IN-NETWORK INCORRECTLY BY INSURANCE COMPANY

Unless the medical provider SPECIFICALLY and in writing indicates that they are in your network at the time services are rendered, the information in your insurer's participation guide and/or on-line may be outdated.  The participation books usually have some sort of disclaimer that states the information is valid as of a certain date and subject to change at any time and some carriers also have a similar disclaimer on-line!  So how can you be sure that you're going to a participating provider?  Make a copy of the page in your booklet or print out the active on-line information and then call the carrier to confirm participation.  Absolutely get the name and extension or some sort of identifier of the insurance representative and document that on your print out along with the date and time of your call.  If possible, do the same at medical provider's office (however, many medical offices have restrictive policies on making and/or signing free form documents for patients).  This is as close as you can get to a guarantee of coverage as you'll have a solid argument should your carrier fail to pay the bill due to participation issues.

• EMERGENCY SERVICES @ IN-NETWORK HOSPITAL BY NON-PAR DOCTOR

Most specialists simply will not join the managed care networks because they are not willing to accept a reduced reimbursement while dealing with increased bureauracy.  The specialist is brought in by the E.R. doctor when a medical condition is beyond the scope of their care or is specifically asked for by the patient or the parent in the case of a minor.  For example, a patient has a hand injury with nerve damage the E.R. Doctor would call a plastic surgeon, hand specialist to perform the repair or say a child gets a gash on the face that could be fixed by the E.R. doctor but there would be less chance of scarring if a plastic surgeon was called in to do the repair.  In both cases you run the risk of being billed all or part of the specialist's fee due to non-payment or under payment by your carrier.  Most policies have a provision for out of network emergency care (sometimes it is mandated by the State's insurance commission).  As soon as reasonably possible, call your carrier and advise that you've received these out of network services and ask what (if anything) you need to do to ensure payment.  You may have to wait for a denial or for the carrier to make the payment at a reduced rate to appeal their decision in writing.  The key question to ask when speaking or writing to your carrier  on a dispute for coverage of a particular specialist is "Please tell me what In-Network (enter specialty type) doctor works at this hospital?".  The answer almost always is "We do not have any contracted (enter specialty type) doctor at hospital X"  With that, you have a solid basis for appeal in that you needed the service of a specialist and your carrier did not give you the option to obtain one in-network.

• THE CARRIER PAYS WHAT THEY DEEM IS A REASONABLE FEE

Entities in the medical billing and reimbursement arena use indices to determine what they bill and what they'll pay for specific procedures.  They also adhere to standards on when it is appropriate to bill procedures separately or together (known in the industry as bundling and unbundling).  The problem arises when you receive out of network treatment and the insurer uses a lesser index to reimburse the doctor.  The doctor is not bound by that reimbursement and may balance bill you for the difference.  If the service is an elective procedure booked in advance you can try to obtain the insurance codes and fees from the doctor and call your carrier to find out what they pay for those codes.  If you're able to find out what the expected reimbursement will be, you can speak with the doctor's staff and find out what their policy is on the difference.  If the services were of an emergent nature you can use the "I didn't have the option of an in-network specialist" appeal (detailed above).

States with "No Fault" insurance for automobile accidents (such as New York & New Jersey) have an entirely different set of rules that are equally as complex and confusing as the rules that govern traditional health insurance.  The links below take you to each State's web site page with detailed information on how their "No Fault" insurance systems work.

          State of New York

• I HAVE COVERAGE & WASN'T AT FAULT, WHY DO I HAVE A BILL?

In Summary, No Fault is just that.  It doesn't matter who caused the accident, each party uses their own coverage to pay for medical treatment almost regardless of the circumstances.  To further complicate matters, if you do not have your own coverage but live with a relative that does their insurance pays for your medical care!  As ridiculous as this example sounds this is the way you would handle a medical bill from an auto accident in New Jersey.  A passenger is sitting in a car at a red light and is rear ended.  The passenger does not own an automobile and therefore does not have or need to have no fault insurance but the passenger lives with her sister who owns a car and has a valid no fault policy.  Believe it or not, in order for the medical bills to be paid, a claim must be filed against the sister's policy!  If the sister's policy has the standard coverage limits, the passenger who was doing absolutely nothing wrong would be responsible for a $250.00 deductible and a 20% co-pay of all bills up to the 1st $5,000.00 and any charges that exceed $250,000.00!  Some health carriers will pick up all or part of the deductible/co-pay and you may file a suit to recover other unpaid fees but that does not relieve you of your responsibility to the doctor in the mean time (see "this is to be paid out of the proceeds of a law suit" on the "Collection Problems" page) and could still find yourself in collection for these fees.

If you sustain an injury or become ill as a result of your work, the primary carrier would be your employer's workers compensation carrier.  In a perfect world you would receive treatment, the medical provider would submit their bill and payment would follow shortly thereafter.  However, it is almost never that easy!  Many times insult is literally added to injury as the bills go unpaid and end up in collection as the responsibility of the injured party!  Some of the more common reasons are as follows:

• THE EMPLOYER DOES NOT HAVE OR LETS THEIR COVERAGE LAPSE

Workers Compensation is managed at the State level and States require businesses to maintain a workers compensation policy to protect their employees, with very few exceptions.  If your employer does not have coverage the worker can file a cause of action against that employer to compel them to pay their medical bills.  Most States also have a fund to protect workers from uninsured employers.  However, this is a fairly complex endeavor that is best handled by a qualified attorney.  If you find yourself in this situation and don't wish to pursue your employer, the medical providers will look to you to pay their bill and in that the service was work related they are not allowed to bill your health insurance for such fees.  States require employers to post signs indicating that they have valid coverage.  The sign usually lists the name of the carrier, how to contact the carrier and the period that the coverage is valid.  It's a good idea to check on that coverage directly, especially if you work in a field that has a high incidence of employee injuries.

• WORKING OFF THE BOOKS OR AS A SUB-CONTRACTOR

If you knowingly work "off the books" (an argument could be made that any time you accept wages without withholding and/or the filing of formal tax documents like a W2 or a 1099 you know or should know that the wages were "off the books") or work as a sub-contractor, workers compensation insurance benefits will not be available to you.  Again, if the cause of the accident or illness is properly reported as work related you lose any chance of health insurance paying the bill.  Many times the employee enters into this agreement with a verbal assurance from the employer that should he or she be injured they will pay the bill.  If you can, get the employer to give you a written statement that they will pay the bill in the event of injury and/or have them sign a responsibility form for you when medical services are rendered.  If they won't, odds are they will not pay your bills should there be a problem and you will be held fully responsible!

• SERVICE OR HEALTH  PROVIDER NOT APPROVED BY INSURANCE COMPANY

With the exception of emergency services, all workers compensation related care must be approved by the carrier in advance.  If you seek non-emergent care without proper approval you do so at your own peril and cost.

• HOUSEHOLD ACCIDENTS

If you are injured at a friend or relatives house by their pet or while helping them move furniture, etc.  and they have a homeowner policy there may be coverage for your medical bills.  The homeowner policy may have a standard $5,000.00 medical rider.  The homeowner should contact their agent or insurance company for details on the coverage and on how to file a claim.

• COMMERCIAL PROPERTY ACCIDENTS - SLIP & FALL, ETC.

If you were to injure yourself at a mall or in a department store, etc. through negligence on the part of the property owner, there is usually a med-pay component to their insurance coverage to pay for medical bills.  These establishments are sometimes sensitive to personal injury law suits and may want you to sign a release of all liability before they'll pay for your medical bills.  So if you wish to pursue compensation for lost wages and/or pain and suffering you would want to speak with an attorney before signing the release.  However, if you do wish to start a law suit against the property owner and with that they refuse to pay the medical bills till the suit is heard, you will be responsible for the bills in the mean time (see "This is to be paid out of the proceeds of a law suit..." on the "Collection Problems" page).

This is probably the most frequently asked question at our agency "I have insurance and they should pay (or pay more than they have) and they haven't, what can I do?" 

Dealing with insurance companies is part art, part science and can be an extremely difficult and frustrating experience.  You MUST have a detailed plan of attack to get them to address your situation or you will FAIL!

• GET ORGANIZED

Get your papers together with the dates of service, providers, billing dates, reason for denial, etc. BEFORE you call or write them.  It's generally not easy to reach someone at an insurance company and you want to have all the information necessary to resolve the problem should you get to a helpful person.  

The number one answer that insurance companies give to their members that call them regarding unpaid bills is:.

WE HAVE NO RECORD OF THE CLAIM, HAVE THE DOCTOR RESUBMIT IT!

We've seen paperwork and heard representatives say this to patients on cases where the carrier has already made a partial payment or where they've denied the claim in writing!  If you know when it was billed, how it was billed (electronic or by mail) and what the carrier's response was, you can circumvent this obvious attempt to get you off the phone without providing assistance.  The doctor's office, their billing service or collection service should be able to give you detailed billing information as it is in their best interest as well to have the insurance carrier held to task.

• BE COURTEOUS WHEN SEEKING HELP FROM THE INSURANCE COMPANY

Dealing with an illness/injury to you or a loved one compounded by serious problems with medical bills is enough to push anyone to the edge.  However, venting your frustration on the insurance representative is only going to be counter productive to your attempts to resolve the matter.  These people deal with angry consumers all day and it's simply human nature to do more for the person that treats you with respect than the one that speaks to you in a demeaning manner.

• ASK DIRECT QUESTIONS AND REQUIRE DIRECT ANSWERS

Insurance companies love to speak in generalities with words like "review", "processing", etc.  Ask what those words mean, what happens next and when!  For example, they'll frequently say the claim was put into "processing".   What EXACTLY does that mean?  How long does "processing" usually take and does that mean a check is being cut?  Until you can get a check number and a date when the check will be mailed "processing" means ABSOLUTELY nothing! 

• IF YOU ARE GETTING NOWHERE, MOVE UP THE FOOD CHAIN

Frontline people in most insurance companies are there to answer very basic questions and don't have the experience or authority to address complex situations.  If you feel that you are not being heard and the insurance representative is responding with scripted answers ask to speak with a supervisor. VERY IMPORTANT, before you are transfered ask for a name and direct number and/or extension for the person you are being transferred to.  Nothing is worse than spending a long frustrating time on the phone trying to fix your problem only to be cut off during a phone transfer and ending up back a square one.

• CREATE URGENCY AND ACCOUNTABILITY

If you are in collection with a clock ticking against you, let them know that you will hold them responsible for any damage you incur due to their lack of cooperation!  Fax them copies of collection letters and/or legal summons.  Also, you must impress upon them that you are not going away and that you will follow this all the way to the end.  In order to do that you need to find an easy way back to the person that is helping you by getting their name and direct line and/or email!

• GET HELP

If your insurance is through a large group, the policy administrator probably has a contact at the insurance company to deal with policy issues.  There's power in numbers, the carrier is more likely to respond to the policy administrator to protect their contract than a call from an individual.  Agents also have contacts and experience at dealing with such problems.  The collection agency can give you advice on how they've helped others in similar situations.  Complaints to the Commissioner of Insurance rarely resolve issues on their own.  However, if the carriers is under investigation by the State for unfair practices they will be very responsive to an inquiry from the Insurance Commissioner.

The content of this page is for informational purposes only and is not intended to serve as legal advice.  Further, the content of this page covers the handling of debt collection matters in our area of specialization based upon our practices and procedures in general and may vary with other agencies as well as with specific situations within our own agency.