Nobody is happy when an insurance claim is denied. The patient certainly isn’t happy, the doctor isn’t happy, and believe it or not, the insurance company isn’t exactly thrilled either.
We’d prefer to process claims without delay and without causing any headaches for anyone involved, especially our members. But claims are denied for a number of logical reasons, and it’s important for consumers to understand those reasons.
Before we get into why a claim may not be approved, we want to remind you that we have an appeals process for denied claims. And every time we process a claim, we send an Explanation of Benefits (EOB) showing how a claim was processed – unless the claim involves a co-pay. If a service was denied, the EOB gives codes that explain why.
1. Lacking or Incorrect Information
This happens a lot, although it may not always result in a denial. If we receive a claim that’s otherwise correct but is missing some information, we mail it back to the doctor or hospital with a letter explaining what is needed in order to process the claim. The doctor or hospital should send the claim again, with the missing information, and without marking it as corrected. A claim that is received after a mailback is an original claim and should therefore not be marked as corrected. (See number four below.) Common reasons for a mailback include wrong date of birth, wrong name, or wrong Social Security number.
This can be frustrating for consumers, as they’re generally not responsible for any error.
2. Non-Covered Benefits
Your plan may have some benefits that have a visit limit, like physical therapy. Once you have used all the visits, claims for more visits won’t be paid. Some plans have a dollar limit on services like infertility. Or your plan may not cover a particular benefit at all, like acupuncture. For plans offered by employer groups, the decision to cover or to limit coverage depends on the group’s plan design.
Sometimes, coverage may have ended or benefits have changed. Verifying that a service is covered before receiving it is one way to avoid a denied claim.
3. Prior Review and Certification was not obtained.
Some services need prior review and certification from Blue Cross and Blue Shield of North Carolina (Blue Cross NC.) If those aren’t obtained before you receive services, the claim will be denied. Most inpatient stays, skilled nursing facility admissions and all private duty nursing services need prior review and certification. They are also needed for certain other outpatient services like MRI, CT and CAT scans. See your benefit booklet for details or see our website.
If you receive services in North Carolina from an in-network provider, the provider is responsible for requesting the prior review and certification. If the services are denied for failure to get prior review and certification, the provider, not you, is responsible for the charges. For out-of-network services or services outside of North Carolina that require prior review and certification, you are responsible for requesting or having your provider seek prior review and certification from Blue Cross NC. As with claims, if you have a concern about the final decision of your care, you have the right to appeal that decision.
4. Duplicate Claims
Sometimes, a claim may be denied because there is an exact duplicate of the claim already in our system. This can happen because the claim has not been processed and the doctor or hospital sends us another one. It can also happen if a provider changes something from the original claim that has already been processed, but fails to mark the second claim as corrected. Claims can also be denied as duplicates if a service was performed more than once on the same day. While this does happen, there are a couple ways to fix the issue: the second claim may need to be modified to help clear matters or the provider may need to combine the duplicate codes and change the number of units that were billed.
5. The service doesn’t warrant separate payment.
This happens when billed services are mutually exclusive. Mutually exclusive services cannot be provided in the same session “based on anatomic or temporal consideration,” according to the Centers for Medicare & Medicaid Services.
As an example, a doctor or hospital cannot bill for a first visit and a follow-up visit at the same time.
Another way to look at this denial is, the service is included in the primary procedure, and is done the same day, or within the global period. A global period for a surgery for example, includes all necessary services normally done by a surgeon before, during and after a procedure.
What You Can Do
Become familiar with what your plan covers. Make sure your plan covers the procedure before you get it so there will be no surprises afterwards. Find out if the procedure you need needs prior review. If your claim has been denied, read your EOB carefully and see the reason for the denial. Check this against your benefits booklet. If you’re still concerned please contact us.