…Not a guarantee of payment. Huh?

Your doctor recommends a test or procedure. You’re a wise consumer. You ask your doctor or hospital to pre-authorize coverage, or maybe you even get the codes they will use to bill and call your insurer yourself. You get a pre-authorization reference number or a letter, but somewhere in the documents is a statement that is easy to miss: “Prior Authorization is not a guarantee of payment.” Huh?

 

In the ever-confusing world of trying to navigate “medical insurance-ese,” all too often  even after getting pre-authorization from their insurer, has received care, and then, much to their surprise the insurer sends an explanation of benefits stating they’re not going to pay. Can they do this??

 

Unfortunately, they can. All because of that phrase included in the pre-authorization notification, that says pre-authorization doesn’t guarantee they’ll pay the claim. Let’s look at why this happens.

 

There are two steps to an insurer moving forward with paying a claim for services. The first is whether the policy itself includes coverage for the service. When your doctor or provider submits the codes for the service they’re pre-authorizing, the insurers’ systems check that code against the codes that they have loaded as covered under your specific policy. Keep in mind that not every policy covers all healthcare services. Some services are specifically excluded and usually spelled out in the big policy document, aka the Certificate of Coverage. The second step the insurer takes is to review the requirements for those services to make sure that the proposed service is “medically necessary.” They may request more records from the provider to complete that process.

 

There are several reasons why, after this process is executed an insurer might turn around and deny the claim.

 

  • Sometimes something has changed with your eligibility for coverage; this is a not uncommon way that people find out that a premium payment was missed and their coverage was terminated.
  • The services were billed with different codes than the codes that were submitted. There is a time lag from when the codes are submitted for pre-authorization and when a procedure actually occurs. So different people may be entering the codes; user error happens.
  • The procedure that was done in real time changed or additional services were submitted for payment.
  • When the medical records are reviewed after the service, the service is deemed “not medically necessary” based on the policy.

 

“Medical Necessity” is a legal term, not a medical one. All health insurance policies have detailed requirements based on published studies regarding what treatments are effective and safe. Those policies drive what they will pay for under the term “medically necessary.” If your procedure followed those guidelines, then it meets medical necessity and the claim will be paid. But especially with the high cost of healthcare, many procedures have “steps” that doctors and patients are required to take (Ex. 6 weeks of physical therapy) before a surgery, (Ex. certain back surgeries) to meet the requirements to be covered.

 

Theoretically when a provider calls for pre-authorization if there are medical necessity criteria they are usually, but not always requested for review. Sometimes though, that piece slips through the cracks. Certain insurers have also clamped down on paying for services provided in the emergency room if they don’t feel the care met their standard of an emergency. Those records to support a claim obviously won’t be provided until after the emergency is over.

 

This is a frustrating and often upsetting experience. Patients aren’t without recourse, though. A claim that was pre-authorized and then not paid can be appealed. Sometimes a doctor or hospital will advocate for you and handle an appeal. If you decide to appeal, this past post might be helpful. But the critical fact is that ultimately the patient is the one responsible for the bill, even if you did everything right to assure you were covered. So if you find yourself in this situation, remember that hospitals, doctors, and insurers often want to and do help in this process. But the fact is their interests aren’t the same as yours. This is when a private patient advocate who is working only for you can support your best interests.

 

Call us. We can help.

 

 

 

 

 

 

 

 

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