Jun 17 2008
RamblerInsurance Fraud is Business as Usual in the US
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The health insurance system in the United States works great, as long as you stay healthy. It’s only people who need medical care who have problems.
Here is the basic scenario:
You go to the doctor and pay directly. You send your bill to the insurance company for reimbursement. You then get a form letter from your insurance company rejecting the claim. It happens frequently.
If you’re persistent, you call your insurance company and demand to know the reason the claim was rejected. The insurer gives you a form for your doctor to fill out. Your doctor fills out the form and returns it but still the insurer does not pay the bill.
If you’re very persistent, you call back your insurance company and demand to know the reason the claim has not been paid. The insurer tells you that they never received the form from the doctor. With irritation, the doctor fills out the form again. The bill is still not paid.
If you’re extremely persistent, you call the insurer again and demand to know the reason the claim was rejected. The insurance company this time tells you that the doctor filled out the wrong form.
In the end your persistence may pay off and you will get reimbursed for your claim. It helps if you are well-educated in your rights under the insurance contract, though.
What if this denial scenario involved someone who is not very well-educated, has a language barrier, or does not have the physical or mental ability to pursue the insurance company? That person might just have assumed the insurance company was right to turn down their claim and not contested the issue. Or, if they contested it once, they might have let it drop after the first round or the second.
An insurance company denies a claim initially almost as a matter of course. For the price of a stamp, they can save themselves a reimbursement that may cost them thousands of dollars. Worst case scenario, they encounter persistent people who demand that they honor their contract. When this happens they only end up paying what they would have paid in the first place and they are able to make money on the float until they do pay. They don’t face any fines or penalties for wrongly denying these claims.
What is the basis for denied claims? You can’t get that information. How often do insurers deny claims? You usually can’t have this information either.
This is not the only information that you can’t have. With most policies, when people go “out of network,” the insurance company will reimburse an amount that is 70 % to 80 % of the “reasonable and customary” rate. This rate will not typically be disclosed in advance by the insurer. This means that patients will not know how much a doctor visit will actually cost them until after the doctor submits the claim. Also, the insurer is free to change their reimbursement rate at its own discretion. In addition, the insurance company can, at its own discretion, change what procedures are and are not covered.
Most businesses don’t get to write their own rules. There is no reason to make an exception for insurers, especially since they typically are dealing with people with serious health problems. This being the most vulnerable segment of the population.
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