What exactly is “medical necessity” and why do health insurance companies use it in their language to dictate whether a person is given coverage or not? Medical necessity is broad enough to be interpreted in many ways. To the insured, it is whatever improves physical or mental health. For a Health Maintenance Organization (HMO) or a Managed Care Program, the definition is whatever they can or rather want to cover. For a doctor, it’s a combination of both with possible incentives from insurance companies to supply the most cost saving treatments. To further this divide in definition, HMOs hire third party specialty management to review claims in which can be even more restrictive to any measure of aid. This cluster of a system delays treatment in favor of stifling costs and making profit over injury to the insured which may result in irreparable harm or death. To that extent, insurance companies require primary care physicians or PCPs to request prior authorization before starting any form of preventative measure.
Insurance Companies Intentionally Create Burdensome Processes
The time the physician and staff spend persuading an insurance company to cover a medication or procedure is an expensive and irritating distraction from the task of caring for patients. In 2006, PCPs spent an average of 1.1 hours per week on authorizations while primary care nursing staffs spent 13.1 hours, and primary care clerical staff spent about 5.6 hours, according to a 2009 study published in Health Affairs. The same study concluded that the overall cost to the healthcare system of all practice interactions with health plans, including authorizations, was between $23 billion and $31 billion annually. More recently, a study of 12 primary care establishments available in the Journal of the American Board of Family Medicine put the average annual anticipated cost per full-time equivalent physician for prior authorization activities between $2,161 and $3,430. The study’s authors concluded that “preauthorization is a measurable burden on physician and staff time.” Physicians have to find the most affordable method of treatment rather than the most effective because of authorization restraints due to HMOs. This is only one method of delays that HMOs use to deny or adjust payments from the insured. There are four other reasons why an insurance company may deny your claim.
- 1: According to the AMA’s National Health Insurer Report Card, the top reason for rejected claims by large HMOs was due to “non-covered charges” aka medical necessity. Insurance agencies request for additional information which can be a precursor to denying a charge or service as non-covered. Or HMOs hire third-party specialists to deem what is medically essential.
- 2: HMOs usually require the insured to receive treatment from specific medical providers. If an individual chooses to use someone outside of this network, the physical or specialist hasn’t agreed to the HMOs terms of payment. Therefore an out-of-network provider is the participants’ responsibility.
- 3: The smallest of details can also be a reason why HMOs deny a claim. If personal information is incorrect such as birth date, name or even right diagnosis code, the company cannot supply any aid.
- 4: Sometimes due to negligence a doctor’s office may bill the wrong company. Insurer’s need to make sure that they have updated their information from previous times or check to see if their coverage is still active. There may be times when work-related injuries or accidents will be denied because they think the responsible party should be liable in that situation.
Dolman Law Group Accident Injury Lawyers, PA will hold Insurance Companies Accountable
Each one of these issues is just a summation of the many reasons why health maintenance organizations deny coverage. By having these reasons for denying claims, HMOs are able to save money and use cost-effective techniques to raise their profit margin; regardless of the effects on participants. If you or a family member has been wrongfully denied by a health insurance company, contact Dolman Law Group Accident Injury Lawyers, PA for a free case evaluation and consultation.
Dolman Law Group Accident Injury Lawyers, PA
800 North Belcher Road
Clearwater, FL 33765