As a healthcare consumer, it’s often difficult to determine who is going to pay for a procedure. Why? Because there are two common misconceptions about how insurance works.
For example, I needed to have some blood work done that was a little ‘out of the ordinary.’ Concerned about the cost, I asked 1) the provider, 2) the provider’s nurse and 3) the office assistant the same question:
“Does my insurance cover this test?” All three said, “Yes.”
Then I asked them, “How do you know for sure?”
Their answer: “Well, your insurance company has covered it in the past.”
There are several reasons why this explanation may not apply to my particular situation and therefore, my test may NOT BE COVERED:
- I am on a self-funded plan that can write its own coverage rules to a large extent (even within ACA guidelines), so just because I have the same carrier as another person, that does not mean that this test will be covered.
- This particular test requires a patient meet certain clinical guidelines in order to be covered (i.e. not just anyone can get it paid for). Insurance carriers change those guidelines and the provider didn’t confirm ‘real-time’ that my particular medical situation met the current guidelines for the insurance carrier.
- Even if I did meet those clinical guidelines, my insurance carrier may either internally or with an outside medical management vendor require prior authorization before the claim is submitted. When I asked the provider if they needed prior authorization, they said they didn’t know.
- Even if the provider’s office or lab contacted the insurance carrier prior to performing the test and was told it would be covered, the insurance carrier representative could be incorrect so that when the claim is actually submitted, the claims processing system will deny it.
Misconception No. 1
If you ask your provider if a test or procedure is covered by your insurance, regardless of your provider’s answer, the real answer is: Maybe. Not Yes. Not No. But maybe.
Next I asked, “How much will the test cost?”
Their answer: “It’s expensive, but the lab will call you if your out-of-pocket cost is projected to be more than $100 to see if you still want to proceed with the blood test.”
I didn’t know what expensive meant: $50? $500? $5,000? I also wanted to know not only what it would cost me, but also what the total cost of the test was. Because I am on a self-funded plan, whatever I wasn’t paying for the test, the insurance carrier wasn’t paying for it either… my employer was paying for it.
Even if I worked at a fully-insured employer, the insurance carrier STILL is not ‘really’ paying for the test… they just charge premiums to employers based on their claims costs and add a percent for their administrative costs and profit margin.
Now things are somewhat different for individual insurance policies and group insurance for smaller companies with less than 50 employees, but the majority of privately insured Americans do not fall into those two categories. Therefore…
Misconception No. 2
If your provider says “insurance pays for it,” what that really means is that your employer or your spouse’s employer is paying for it. The insurance carrier manages the transaction. They don’t bear the risk for the claims.
It’s like a teenager who has a Visa credit card that his/her parents pay every month. If the teenager goes to the mall to buy shoes and the shoe salesman says ‘Visa’ will pay for it, the teenage knows Visa doesn’t really pay for the shoes… it’s his/her parents.
In many ways, insurance carriers are like Visa—they act as a middleman in the transaction, but don’t actually pay for the service. It’s still a vital service (just like Visa is a vital service), but it needs to be understood in the proper light.
In summary, if your doctor, hospital, nurse, clerk or staff stays “It’s covered and your insurance will pay for it,” what that really means is:
“Maybe it’s covered and your job will pay for it.”
To learn how Compass helps the employees of over 2,000 companies understand their benefits and understand how health insurance works, visit www.compassphs.com