How to Handle Large Disallowed Amounts on Insurance Claims

Filing insurance claims requires careful planning and evaluation. Your insurance company expects you to justify your claims with all possible proofs and reasoning. If you file for too much or overvalue your claim, insurance providers are likely to disallow the entire amount or a part of the claim requesting further clarification. Health insurance is one of the most common known forms of insurance where companies have largely disallowed amounts of the claims. You need to handle this professionally, resolutely, and with patience.

Difficulty: Moderate

Instructions

1. Read carefully the response letter from your insurance company. All disallowed amounts usually fall under the category of UCR (Usual, Customary and Unreasonable). A Usual fee refers to charges levied by a doctor for a specific treatment. The Customary fee is fixed by the administrator of a benefit plan and indicates the maximum amount payable for a specific treatment. The Reasonable fee refers to the charges levied by a doctor after change in treatment following medical complications.

2. Learn more about the UCR practice as the clauses vary from one company to another. Sometimes, insurance companies do not allow doctors to charge more than the usual fee. In such a situation, the doctor will not get full reimbursement from the insurance company and you may have to pay for the difference.

3. Learn about ways to handle UCR charges. You can inquire with your insurance provider how they process UCR charges under your health plan prior to seeking treatment. You can choose a company that accepts UCR charges. In most cases, when there is a disagreement on UCR charges you will receive a notification from the company stating that the claim charges are unreasonable and so claim amounts shall be disallowed.

4. Appeal the statement of the company if you think your health plan comprehensively provides coverage on the claims.

5. Take help from the doctor involved in the treatment. Request proofs and justification for receiving a particular treatment.

6. Check the employee benefits provider or your health plan to learn more about the appeal process.

Tips & Warnings

• Request a written explanation from your insurance company about the method used to determine the rates.
• Contact your state’s insurance regulators and get their help on handling disallowed claims.
• Be sure to understand the working method of HMOs (Health Maintenance Organization) and PPOs (Preferred Provider Organization) which have pre-qualified health care providers who do not follow the UCR procedures. The fees are usually fixed and there is a very remote chance of dispute.
• Every plan has its own method of estimating and measuring UCR. Be sure to check this practice before purchasing a health plan.
• Know your rights as per the state law, but work under the preview of your health plan.