Health Insurance Claims Processing Issues

Insurance claims are processed in two ways: electronically or via a universal paper claim form. Regardless of which method is used, claims can be delayed or denied for several reasons. If you are aware of a few common billing errors, you might be able to avoid or resolve some issues with processing insurance claims.

History

A national universal claim form was approved by the American Medical Association in April 1975. This universal form allows for a standard format and quicker claims processing by insurance carriers. Before 1990, all claims were processed manually; however, as technology advanced, equipment was developed to optically scan and auto-adjudicate, or digitally process, universal claim forms.

Process

A paper insurance claim form is filled out and mailed or faxed to your insurance company. The insurance company then scans the document and converts it to an electronic format. Alternately, an electronic claim is submitted directly from your physician’s computer to your insurance carrier’s computer as a digital file. This is received in the necessary electronic format for processing. Regardless of how the form is submitted, the digital data ultimately is run through a software program designed to review the claim for all the required information, and the program either approves it or denies it.

Human Error

Human error can cause the processing software to reject an otherwise appropriate claim. For example, if you hurt your finger playing baseball and go to the emergency room, your claim should have a diagnosis code for a finger injury. However, if the claim is submitted with a diagnosis code for a finger injury and a procedure code for a chest X-ray (instead of the code for a finger X-ray), the system won't process the claim because a chest X-ray is not an appropriate procedure for an injured finger.

Other Issues

Each insurance carrier allows a specific amount of time after your date of service for a provider to submit a claim, and claims submitted outside this time frame are denied. Claims also can be denied when the specific information required is missing, recorded incorrectly or illegible. This information can include the patient's name, member identification number, date of birth, diagnosis code, procedure codes, date of service, place of service, amount charged, physician’s identification numbers and physician’s signature.

Solution

After each claim is processed, an explanation of benefits (EOB) is sent to you from your insurance carrier. The EOB details how your claim was processed, how much you owe your provider and how much the insurer paid your provider. If a portion was not covered, the EOB will list a reason code, giving you an explanation. If you do not understand what the code means or you believe there is an error, call your insurance company and ask for assistance. Your insurance company can tell you the reason the claim was not paid. If it is something your provider needs to correct, your insurance carrier will contact the provider regarding the mistake.

COBRA Insurance Requirements

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) created a Federal Law requiring most employers with more than 20 employees who offer group health care coverage to give their employees, spouse and their dependents the option to continue their health care coverage when a loss in coverage occurs. COBRA coverage is the same coverage the employee had when they were actively working for the employer. However, the employee is responsible for 100 percent of the premiums, plus possibly a two percent administration fee.

Qualified beneficiary

You, the employee, your spouse and any dependents who were covered on your health insurance plan the day before you lost health insurance coverage are considered a qualified beneficiary and eligible for COBRA coverage.

Qualifying event

Quitting your place of employment, being let go from your place of employment or having your hours reduced so you are no longer considered a full-time employee are all considered qualifying events. A qualifying event makes you, your spouse and your dependents eligible for COBRA coverage. Additional qualified events for your spouse and dependents include if you pass away, get divorced or have a child reach the maximum age eligible for coverage on your plan.

General notice

When a qualifying event occurs and you lose your insurance coverage, COBRA law requires your employer to notify you of the COBRA law and your potential eligibility for COBRA. The notice sent to advise you of this information is called the general notice. The general notice must be sent to you, your spouse and your dependents within 90 days of the date your coverage ends.

Qualifying event election notice

The qualifying event election notice informs you of your right to continue your health insurance under COBRA. The notice must be sent out within 44 days of your employer being made aware of the qualifying event.

Time frames

Within 60 days after the qualified event notice is mailed or after your coverage ends, whichever is later, you have 60 days to decide whether you want to elect COBRA coverage. If you elect coverage, you have another 45 days to pay all the retroactive premiums due. Going forward, you will then have a 30 day grace period to pay your monthly COBRA premiums.