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Archive July 2013 XIV, No. 7

Coding & Billing: 10 Things Insurers Don't Want You to Know

Learn the keys to fighting denials and fending off refund demands.

Karlene Dittrich, CBCS


wrongfully deny claims SNEAK Most claim denials and payment demands are invalid.

Every year, it seems, insurers think of more ways to wrongfully deny claims and make inappropriate refund demands. As a claims recovery and appeal specialist, I see it all the time. Sadly, you might not realize that most claim denials and payment demands are invalid. Insurers rely on ambiguous rules, disingenuous contract provisions and ever-changing "policies." They thrive on complexity and confusion, writing contracts that keep provisions open to interpretation — their interpretation.

But knowledge is power. Knowing your rights and the laws — things insurance companies would rather you didn't know — puts you in a much better position to collect what you're owed. Here are 10 things to keep in mind when it comes to their motives, your rights and how to collect what's yours.

Insurance companies may not be focused on quality care or what's best for their customers.
Reports show insurers earn their profits from investments. They're focused on satisfying stockholders, not customers. They closely monitor earnings and their medical loss ratio — the difference between what they pay out and what's left over for administrative expenses and profits. Now, because of the Affordable Care Act (ACA), they must spend a specific percentage of their premiums on claims and activities to improve health care. Otherwise, they have to pay rebates. How does this affect you? Because their goal is to maximize profits, insurers look for other ways to increase earnings. One way to recover from unexpected losses is to increase denials and make unreasonable payment demands.

Insurance companies are required by law to pay claims.
There's an implied covenant of good faith in every insurance contract. State and federal laws require that denials be based on facts, not speculation. If you know the rules, you can address attempts by payors to skirt laws, or use only portions of laws, to justify denials. Something else to watch out for: Payors sometimes justify denials by citing one state law, even though another state or federal law — one that supports a claim — is more applicable.

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