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Resolving Health Care Insurance Disputes
A total of more than 35,000 health care insurance complaints will be made to state insurance departments in 1998, according to the projections of the National Association of Insurance Commissioners (NAIC).
Faced with strong public demand for assistance in dealing with HMOs and health care insurers, state insurance departments routinely go to considerable lengths when intervening on behalf of consumers who plead for help in dealing with health care claim denials, disputed claims, slow payments by health insurers, and premium-related matters.
THE SCOPE OF STATE INSURANCE REGULATION
State insurance regulation of health insurance covers millions Americans. The health insurance regulatory breakdown for Americans is as follows:
- State regulation. Some employer or employee groups purchase health insurance coverage from an insurance company. Others may purchase group health coverage from a health maintenance organization (HMO). Both are called fully insured health benefit plans. Insurers of such plans are regulated by state insurance commissions.
- Federal regulation. Some employer or employee groups, however, provide what are called self-funded health benefit plans. This means your employer or employee group may set aside funds and employee premiums each month to pay health coverage claims submitted to the plan. If the plan is self-funded and offered by a private sector employer or bona fide union, the designated regulatory authority is the U.S. Department of Labor's Pension and Welfare Benefits Administration. States are not permitted to regulate most valid self-funded plans authorized by Congress under terms of the Employee Retirement Income Security Act (ERISA). In most cases, this means: (1) state insurance departments have no authority to investigate complaints that involve valid single-employer or union-sponsored self-funded ERISA plans; (2) certain other group health plans provided by governments, churches, some school districts and out-of-state Blue Cross organizations also are exempt from most state regulations; and (3) state laws requiring specific benefits in health care plans seldom apply to valid self-funded ERISA plans.
UNDERSTANDING TYPES OF HEALTH INSURANCE
Each year, fewer and fewer Americans are covered under traditional fee-for-service
health insurance plans, in which insured individuals go to a doctor of their choosing and then submit health insurance claims. Today, more and more Americans are covered by one of the following arrangements:
- Health Maintenance Organization (HMO). An HMO provides health services through a network of doctors, hospitals, laboratories, etc. The health care providers may either be HMO employees or have some other contract arrangement with the HMO. HMO plans pay providers a monthly set amount (a capitation fee) regardless of the amount of services performed. When you enroll in an HMO, you choose one of the doctors as your primary care physician (PCP) to manage all of your health care. Whenever you need health care, you first consult your primary care physician. Your PCP may refer you to an HMO-approved specialist.
- Preferred Provider Organization (PPO). A PPO is a group of doctors, hospitals, and other health care providers (preferred providers) who have agreed to provide services to members of a health plan for discounted fees. Some employers combine the PPO with a traditional major medical plan so you can use providers who are not on the PPOs preferred list. But to encourage you to use a provider who is on the PPO list, you will usually have lower out-of-pocket expenses than if you use a provider who is not on the list.
- Point of Service Plans. These plans are essentially HMOs that allow members to use services provided outside of the network without prior approval from a network doctor. Point of service plans offer lower deductibles and no coinsurance for visits to doctors inside the network. Visits outside the network normally require the payment of deductibles and coinsurance the same as a standard insurance policy.
CHECKING OUT A HEALTH INSURANCE PROVIDER
Before you buy health coverage, find out about the company selling the plan. Here are factors to consider:
- Customer Service. Find out how the company services its policyholders. Does the company have a toll-free customer service number?
- Complaint History. Has the company had an unusually high number of consumer complaints? The Maine Bureau of Insurance will have insurer complaint ratios available after January 1999.
- Licensing Status. Call your state insurance department to find out if the insurance company is licensed to do business in Maine.
- Cost. Premiums for health insurance will vary greatly. When you look at bids from several companies, you will also need to look carefully at the benefits offered. Also, keep in mind that the actual cost for your health coverage will be determined after you send information about your health.
- Financial Stability. Financial stability helps ensure that a company can pay its claims. Your state insurance department establishes requirements that each company must follow and continually monitors the financial stability of insurance companies operating in the state. Independent organizations, like A.M. Best, also rate the financial stability of insurance companies. Remember these ratings are opinions only and do not guarantee that a company is financially sound. Your public library may also have published ratings from these sources.
QUESTIONS TO ASK WHEN SHOPPING FOR HEALTH CARE
- What does the plan pay for?
- What does the plan not pay for/exclude?
- What are the limits on pre-existing medical conditions?
- Will the plan pay for preventive care, immunizations, well-baby care, substance abuse, organ transplants, vision care, dental care, infertility treatment, durable medical equipment, or chiropractic care?
- Will the plan pay for prescriptions?
- Does the plan have mental health benefits?
- Will the plan pay for long term physical therapy?
- Do rates increase as you age?
- How often can rates be changed?
- How much do you have to pay when you receive health care services (co-payments and deductibles)?
- Are there any limits on how much you must pay for health care services that you receive (out-of-pocket maximums)?
- Are there any limits on the number of times you may receive a service (lifetime maximums or annual benefit caps)?
About Customer Service
- Has the company had an unusually high number of consumer complaints?
- What happens when you call the company's consumer complaint number?
- How long does it take to reach a real person?
HOW TO MAKE A HEALTH INSURANCE CLAIM/DISPUTE DENIALS
Things to do before you file a claim:
- Review your policy or employee booklet carefully to be sure the service in question is covered.
- Follow any managed care rules, including pre-certification requirements and use of network providers.
- Give claim forms to the provider, with your policy number and other identifying information.
How to submit a claim properly:
- Find out if your provider submits the claim for you or if you need to do it.
- If you need to do it, review the information to be sure it is complete and correct.
- File it as soon as you get the bill from the provider.
- Send it to the right address.
- Keep a copy for your reference.
Allow reasonable time for company to process your claim. The company needs to inform you if it needs any additional information to complete the claim. Sometimes, it will request additional information directly from the providers or return the claim form to you to get more information. After the company has all the information it needs, it has a certain number of working days to process your claim. The company must send you an explanation of benefits that explains its decision.
If your claim is paid:
- If you assigned benefits to the provider, the benefit check will be sent directly to the provider.
- You will pay any deductibles and co-insurance.
- If you did not assign the benefits, the check will come to you and you will need to pay your providers for the entire amount.
If your claim is denied:
- The reason for denial should be stated on your explanation of benefits.
- If you disagree with the basis stated for denial, check your policy or employee booklet for the company's appeal procedures.
- The company should be able to answer procedural questions about appeals over the phone.
- Your appeal should be in writing and may require information from your doctor.
Filing a consumer complaint:
If you've tried unsuccessfully to resolve a claim problem with your company or agent, contact your state insurance department. Very often, companies will resolve disputes after the agency intervenes on a consumer's behalf. If it becomes necessary to file a written complaint with the state insurance department, be sure to include the following information to speed processing of your inquiry:
- Include your name, address, and daytime phone number.
- State your case briefly, giving full explanation of the problem and what type of insurance is involved. Include the name of your insurance company, policy number, and the name of the producer or adjuster involved.
- Supply any documentation you have to support your case including phone notes.
- State what has been done to resolve your problem including whom you have talked to and what you were told.
- For future reference, keep a copy of your letter to the state insurance department.
You can find a complaint form or request one by calling the Bureau at 207-624-8475 or 1-800-300-5000.
If a decision is made that you have a legitimate complaint, your state insurance department will investigate your complaint and keep you advised of what has happened. If a company insists your complaint or claim is not valid, the state insurance department cannot require the company to make payment unless a state insurance law has been violated. In some cases, legal action is the only way to resolve health insurance disputes. You may want to consult a lawyer if your complaint cannot be resolved and it involves a significant amount of money.
WHAT IF YOU AREN'T PROTECTED BY YOUR STATE?
If the plan is self-funded and offered by a private sector employer or bona fide union, take unresolved complaints to the U.S. Department of Labor (DOL) Pension and Welfare Benefits Administration. The DOL does not interpret provisions of any particular health benefit plan or require employers to pay claims, but may investigate your complaint. In certain disputes, the DOL suggests personal legal advice may be your only option.
If the plan is self-funded but offered through a government or church employer, follow the appeals procedures outlined in your benefit booklet and other plan documents. In most cases ultimate responsibility for resolving disputes rests with the governing body of the employer sponsoring the plan, such as a school board.
If you have a disability, you may have certain protections available under the Americans with Disabilities Act (ADA) if your self-funded coverage is dropped or limited. You can reach the ADA Technical Assistance Center at 1-800-949-4232 or the U.S. Department of Justice at 1-800-514-0301 (voice) or 1-800-514-0383 (TDD).
ABOUT STATE INSURANCE REGULATION
Since 1870, the Maine Bureau of Insurance has overseen and regulated the business activities of insurance companies, producers, consultants, and adjusters in our state. To ensure that the marketing of insurance is lawful and honest, policies and premiums are reasonable and just, and the payment of legitimate claims is dependable and timely, the Bureau is organized into the following work units: Property and Casualty, Life and Health, Market Conduct, Legal, Examinations, Financial Analysis, Self-Insurance, Workers' Compensation, Licensing, and Administration.
You can reach the Maine Bureau of Insurance by writing to: The Bureau of Insurance, 34 State House Station, Augusta ME 04333, by calling 800-300-5000, or by Internet at: www.maine.gov/pfr/insurance.
The National Association of Insurance Commissioners is located on the World Wide Web at www.naic.org. It is the nation's oldest association of state government officials, consisting of insurance regulators from the 50 states, the District of Columbia, and four U.S. territories.
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