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Medical Insurance

Filing Claims

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MEDICAL INSURANCE: FILING CLAIMS

Most claims are submitted in writing, not in person or by phone. However in many situations involving PPOs or whenever you have had a choice of a provider you will find yourself in contact with someone from the claims department. Here are the important things you should do before speaking to that person:

a. Review your policy and the notes you took and filed from your conversations with the agent or company representative;

b. Understand exactly what you have to establish in order to receive the benefits (e.g. that the benefit in question is covered; that the deductible or co-pay is $X; that the treatment was not experimental, cosmetic or something else not covered, etc.)

c. If your claim involves a substantial amount of money, run the facts by an attorney.

d. Play devil's advocate, asking yourself what the claims adjuster might say in evaluating the claim;

e. Determine any applicable co-pay, deductible or other limitations;

f. Make sure your doctor or other provider understands what is, and is not, covered before he/she sends any written letters or reports to the company.

g. Cooperate and be polite with company representatives but don’t let them put words in your mouth.

Understand your rights and responsibilities as a claimant. Unless your claim is ERISA Preempted (above) certain principles under the laws of most states have evolved to help protect you in the claims process. These rules can be very important in the handling of a given claim. You should be familiar with them. Generally, insurance companies are precluded from:

a. Making deceptive or misleading representations to insureds either at the time of sale of an insurance policy or with respect to a claim;

b. under-settling valid claims;

c. engaging in unreasonable delay in the settlement of a valid claim;

d. conducting prolonged or unfair claims investigations; or

e. compelling policyholders to sue them in order to collect payments due under a policy;

• Never use harsh, intemperate, extreme or threatening language when corresponding with an insurance representative. Do not say things like: “I’m going to sue you for everything you’ve got.” Or: “Keep it up and I’ll wind up owning your company”. Such letters will come back to haunt you.
  
  
• Do not send CCs of correspondence to VIPs such as Senators, Members of Congress, CNN reporters, The Pope or other luminaries. This never has the desired effect.
  
  
• Keep your correspondence concise, rational, articulate, reasonable and accurate. If you are going to send any CCs at all, send them to the Regional Claims Manager or the Vice President for claims in your company’s home office.
  
  
• Save everything you write and all responses from the company. Keep these letters in your insurance binder.
  
  
• Confirm in writing any significant oral representations or statements made to you. File these as well.
  
  

Save any significant letters or memos to or from third persons (such as contractors, physicians, appraisers or other experts) if they pertain to a claim or other insurance matter.

 

Speaking with claims representatives.

Preparing before you contact a claims representative gives you a big advantage. This will help you to discuss the most likely issues. You will know a good deal about your coverage and your rights and will have credibility with the company representative. Again, the key, as with all interactions with your company, is to be polite and reasonable in your discussions and negotiations. This is important -- particularly  in situations where you feel that a claims representative is acting unfairly.
    
 

Negotiating

The biggest problems encountered in the negotiating process arise when one or both sides are poorly-prepared, hold an untenable position, or are unwilling to compromise even in a situation that cries out for it.

If you have followed the steps outlined above, these problems should be minimized. The negotiating process is greatly enhanced when both sides are knowledgeable and open-minded. In such situations the negotiation process comes down to five important principles.

You should:

• Advocate your position without being arrogant or obnoxious about it;
  
  
• Listen carefully to the other side's perspective and try to understand where it is coming from;
  
  
• Try hard to bring a sense of humor (dark though it may be) to the table; and  
  
  
• Be firm but reasonable.
  
  
  

Mediation

If, in cases where the amount in controversy is substantial, you are unable to resolve the claim directly with your company, you should then consider contacting an outside mediator. You can do this whether your policy has an ADR provision in it or not.

Mediation is a process whereby an independent third party, chosen by the agreement of both sides and experienced (in this case in insurance matters), steps in and tries to facilitate a resolution of the disagreement. Mediation, unlike certain types of arbitration, is not binding. No decisions are made by the mediator. Instead the mediator simply tries to bring the two opposing sides together in a joint effort to avoid litigation.

There are professional mediators available through organizations such as The Judicial Arbitration and Mediation Services (JAMS), and other organizations which promote mediation services.

Be sure your mediator is objective and does not have a built-in tendency to favor one side or the other.

ADR

Insurers are keenly aware of the cost of prolonged internal claims processing and ADR options. For that reason, the company might be willing to have an experienced third party attempt to mediate a resolution to the impasse.  This is so even if your health policy contains an ADR provision. Your provider would far prefer an inexpensive and non-binding mediation process, to the time-consuming, more formal expense of binding arbitration.  The provider can assign a less highly skilled claims employee to the mediation process than would be required for formalized binding arbitration. Although it may often seem hopeless, a good mediator armed with experienced, non-threatening, persuasive skills, can often bring even the most headstrong parties together.  

 

Complaints to Government Agencies

Most states have handed over jurisdiction for patient healthcare complaints to specific government agencies, such as the state department of insurance, the state department of corporations or the state department of managed healthcare.

If you have a grievance against an HMO, PPO or other health plan your state department of insurance would be a good place to start. They can refer you to any other agency with jurisdiction over your particular situation. For a contact list of Departments of Insurance in the US, visit our DOI section.

 

Statutes of Limitations

Note carefully that there are provisions under the laws of every state that place absolute restrictions on the length of time a person has to file a civil suit for damages. These laws are called statutes of limitations. The time limits imposed depend on the legal theories involved. For example, the statute of limitations for a breach of contract case may be different from the statute of limitations for misrepresentation or fraud causes of action. You need to consult with the laws of your state on this.

In addition, there are often limitation provisions in the insurance contracts themselves. Many policies impose such contractual restrictions on how long an insured has, following a claims denial, to file a claim or suit against the company. This is known as a contractual statute of limitations. If your agreement or contract has such a provision and you do not file a lawsuit within the time period set forth, you may lose all of your rights to recover anything on your claim - regardless of how valid it might be.  

You must take these provisions very seriously. They are usually strictly enforced.

If all Else Fails

If all else fails, you either throw in the towel, or sue. If your case is a substantial one, and is neither ERISA Preempted, nor bound by a legally valid binding arbitration agreement, and if your state permits residents to file suits against insurers or HMOs in “bad faith” cases, you  can do so.