Health insurance is needed by every American citizen to cover the costs that are incurred for various types of medical expenses. Coverage is provided by various types of health insurance companies. One of the main reasons health insurance companies are needed is to pay claims for medical expenses that are incurred by various individuals. Individuals on a group health insurance plan or on an individual policy will all need to submit health insurance claims to an insurance company.
Types of Plans
Insurance companies have different types of plans that are available for group health insurance offered by an employer or for individual policies. One type of insurance plan is a PPO or a Preferred Provider Organization and an HMO or Health Maintenance Organization. A PPO processes claims and will pay their portion of the cost after an individual has received treatment. An HMO determines what is covered and how much will be paid before treatment is given.
Covered Expenses
All health insurers pay for covered expenses that are included on an insured’s health insurance policy. An insurer is limited to the types of exclusions that can apply to specific types of polices by state and federal laws. This generally applies only to group health insurance plans that are provided by an individual’s employer. One type of law that applies to exclusions for health insurance policies is the Health Insurance Portability and Accountability Act.
Explanation of Benefits
All health insurance companies include an explanation of benefits or EOB with each of the health insurance polices that are sold. An explanation of benefits will also be sent to an insured when a claim is processed by an insurance company. The EOB will detail how much of a covered claim will pay or if coverage for a claim was denied.
Denials
Health insurance companies generally pay claims but when they can also deny claims that they are not going to provide coverage. Many times a claim can be denied because it is not a “medical necessity” as defined by an insurer. This can happen when a doctor and insurer disagree about what constitutes a medical necessity. When a claim is denied an insured has a few options available such as appealing the claim denial.
Disputes
Insurance companies have specific procedures in place for insured to appeal a claim denial. These procedures are in place as the result of state laws that mandate a process for appealing a claim. An insured can also consult an attorney for help to appeal a claim. When all options have been exhausted an insured can file a lawsuit in court.