When Dan Brown is done with religious iconography, perhaps he can turn his pen to demystifying the health insurance claims process. It's hard to imagine Tom Hanks as a world-renown health and insurance law professor called in to help the beautiful and equally learned daughter of an HMO claims adjuster who has mysteriously disappeared, but it is not hard to imagine that there are many in Florida saying, "Better him than me."
Nor is it hard to imagine that the majority of policyholders receive an Explanation of Benefits (EOB) form and file it away without glancing at anything but the "patient's responsibility" dollar amount at the bottom. When the number gets high, though, and the doctor bills start coming in, we realize that the insurance company has denied the claim.
The Government Accountability Office released a report this spring about claim denials. According to the report, it turns out that billing and eligibility issues are behind more claim denials than anything else. It's not that the care is inappropriate in the opinion of the adjuster; it's that there's been a mistake in coding.
This is where the EOB comes in. The reason code tells you why the company denied the claim. That code relates to other codes: the CPT (Current Procedural Terminology) code and the ICD (International Statistical Classification of Disease) code.
The CPT and ICD codes are billing codes. The CPT code describes the medical service (the "procedure") the patient receives. The ICD code describes the diagnosis. If the codes don't match, the claim will likely be denied.
Billing professionals also say that the CPT code has to correlate with the patient's age and sex, as well as the place of service. For example, if a child goes in for a routine check-up, but it's coded as a routine physical for an adult, the claim will be rejected.
With the ICD code, entering the wrong code -- even just a typo -- can turn a routine physical into an experimental treatment. The result: Claim denied.
What many policyholders don't realize, though, is that the EOB is not the last word on that claim. A policyholder can appeal that determination, and much of the time the policyholder will be successful.
We'll continue this in our next post.
Source: LA Times, "Health insurance claim denied? Appeal, appeal, appeal," Michelle Andrews, 06/23/2011