Understanding insurance [medical]

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stocknoob4111
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Understanding insurance [medical]

Post by stocknoob4111 »

Perhaps I don't understand Insurance very well, here's a hypothetical situation say I have pain in my chest and go to the doctor and the doctor requests that I have an MRI taken, the MRI shows that there is nothing wrong does the insurance still pay for the MRI or do they deny it saying that it is frivolous since the MRI did not show any thing? How do they determine what is denied and what is approved?

Reading various articles it seems that health insurance companies routinely denied claims that they feel is not medically necessary however in my opinion if a medically licensed professional recommends a procedure to a patient that how is it not necessary?
Last edited by stocknoob4111 on Sun May 16, 2021 6:45 pm, edited 1 time in total.
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RickBoglehead
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Re: Understanding insurance

Post by RickBoglehead »

You can ask them.

An MRI generally has to be pre-approved by an insurance company. Your insurance company may also have an incentive for you tomuse a lower cost provider. The result is not what determines coverage, it is the reasoning for the rest.

Example - you are having a symptom that indicates a possible problem with your liver. Doctor orders MRI to see liver.

That would be different than you saying 'I generally don't feel well". Dr. cannot order MRI without doing lower cost and less invasive tests tomorrow things out. These are generally called "diagnostic tests".
Last edited by RickBoglehead on Sun May 16, 2021 6:48 pm, edited 1 time in total.
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dukeblue219
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Re: Understanding insurance

Post by dukeblue219 »

In general, the results of a test will have no bearing on whether the test is covered.
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stocknoob4111
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Re: Understanding insurance

Post by stocknoob4111 »

The the following article is about a man whose claim was denied and was recommended immediate back surgery by a doctor insurance company decided that the procedure was medically unnecessary which was absolutely ludicrous

https://www.cbsnews.com/news/man-hit-wi ... 019-09-25/

Medical insurance cost a bomb yet you may not have it when you need it most
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RickBoglehead
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Re: Understanding insurance

Post by RickBoglehead »

stocknoob4111 wrote: Sun May 16, 2021 6:51 pm The the following article is about a man whose claim was denied and was recommended immediate back surgery by a doctor insurance company decided that the procedure was medically unnecessary which was absolutely ludicrous

https://www.cbsnews.com/news/man-hit-wi ... 019-09-25/

Medical insurance cost a bomb yet you may not have it when you need it most
You misstate the story. The insurance company said it was not an emergency, not that it was medically unnecessary.

This thread will probably get locked shortly.
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runninginvestor
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Re: Understanding insurance

Post by runninginvestor »

RickBoglehead wrote: Sun May 16, 2021 7:13 pm
stocknoob4111 wrote: Sun May 16, 2021 6:51 pm The the following article is about a man whose claim was denied and was recommended immediate back surgery by a doctor insurance company decided that the procedure was medically unnecessary which was absolutely ludicrous

https://www.cbsnews.com/news/man-hit-wi ... 019-09-25/

Medical insurance cost a bomb yet you may not have it when you need it most
You misstate the story. The insurance company said it was not an emergency, not that it was medically unnecessary.

This thread will probably get locked shortly.
This article was a follow-up, the original article from a few days prior states the carrier tried avoiding on not medically necessary and not an emergency, as they do.
https://www.cbsnews.com/news/back-surge ... er-650000/

OP -

The scenario you describe, it is entirely up to the insurance coverage details. Reading coverage certificates I've come across:
1) Outpatient services/ER services need pre-authorization to be covered
2) Outpatient services/ER services need pre-authorization to be covered, but the carrier holds the option to still determine not to pay after the service
3) Inpatient procedures need to be authorized if they are elective (almost all are elective), but the onus falls on the provider.
And many more variations....
4) If you don't notify the carrier within 24-48 hours of an inpatient admission, they hold the right to deny payment for the care

Some carriers would protect the patient from balance billing (surprise billing) from in network providers, but not for out of network (PPO Plans, HMOs are restrictive by nature).

It's important to read the coverage booklet of plans you're deciding between (if you have the luxury of multiple options). I generally tell people to look at
1) How they handle balance billing - recent legislation in many states and federally have restricted some of this, but it doesn't necessarily apply to self-funded plans
2) Who has to obtain prior authorization, the patient or provider? I prefer plans that require the provider since by nature I have no clue what the specific procedures they are recommending. Many HDHP's I've seen have the patient, which means if the provider or hospital doesn't notify the carrier, you're out of luck.
3) Inpatient admission notification requirements and if ER visits have restrictions. It's odd, but some plans can retroactively deny an ER claim saying it wasn't an emergency.

Edits: spell check, voice to text error fixes
Last edited by runninginvestor on Mon May 17, 2021 11:09 am, edited 2 times in total.
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LadyGeek
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Re: Understanding insurance [medical]

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (insurance). I retitled the thread for clarity.

Please stay focused answering the OP's questions.
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stocknoob4111
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Re: Understanding insurance

Post by stocknoob4111 »

runninginvestor wrote: Sun May 16, 2021 7:59 pm The scenario you describe, it is entirely up to the insurance coverage details. Reading coverage certificates I've come across:
1) Outpatient services/ER services need pre-authorization to be covered
2) Outpatient services/ER services need pre-authorization to be covered, but the carrier holds the option to still determine not to pay after the service
3) Inpatient procedures need to be authorized if they are elective (almost all are elective), but the onus falls on the provider.
And many more variations....
4) If you don't notify the carrier within 24-48 hours of an inpatient admission, they hold the right to deny payment for the care
Thanks, I am aware that the No Surprises Act is being implemented effective Jan 2022 which is a great thing. Thanks for the info regarding Pre-authorization I will have to check this with my policy.. will probably call them to clarify.

I am guessing that any lab procedure has to be covered?

The confusing thing is that sometimes in-network cost is actually higher than if I order the procedure a-la-carte elsewhere. I found this website called https://www.mdsave.com/ which has many procedures at reasonable prices, for instance MRI is around $563 in my area (North TX): https://www.mdsave.com/p/whs-diagnostic ... 8bf5c960d4

Question - is it better to use a service like the above and pay out of pocket rather than rely on in-network coverage? The benefit I see is that the cost is transparent in the above case, the cost is $563 and includes everything. On the other hand I could charge it against my in-network coverage and get a bill for $2000, there is no way of knowing what it is beforehand.
runninginvestor
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Re: Understanding insurance

Post by runninginvestor »

stocknoob4111 wrote: Mon May 17, 2021 11:29 am
runninginvestor wrote: Sun May 16, 2021 7:59 pm
Thanks, I am aware that the No Surprises Act is being implemented effective Jan 2022 which is a great thing. Thanks for the info regarding Pre-authorization I will have to check this with my policy.. will probably call them to clarify.

I am guessing that any lab procedure has to be covered?

The confusing thing is that sometimes in-network cost is actually higher than if I order the procedure a-la-carte elsewhere. I found this website called https://www.mdsave.com/ which has many procedures at reasonable prices, for instance MRI is around $563 in my area (North TX): https://www.mdsave.com/p/whs-diagnostic ... 8bf5c960d4

Question - is it better to use a service like the above and pay out of pocket rather than rely on in-network coverage? The benefit I see is that the cost is transparent in the above case, the cost is $563 and includes everything. On the other hand I could charge it against my in-network coverage and get a bill for $2000, there is no way of knowing what it is beforehand.
<<I am guessing that any lab procedure has to be covered?>>
Not necessarily. First, not all lab procedures are covered services (what the carrier covers) and some covered services don't require prior authorization. For covered services that don't require prior authorization, unless the carrier is really acting in bad faith, or there is poor paperwork, the carrier will typically rely on your doctors claim for medical necessity and will pay...but not always and you'll have to appeal. Additionally, not all procedures/tests are covered services, which insurance won't pay for. Typically common procedures like blood tests and whatnot will be covered and you won't get much pushed back from the carrier.

<<Question - is it better to use a service like the above and pay out of pocket rather than rely on in-network coverage? >>
There is no general answer for this as it is up to specifics. For instance, if it is towards the end of the year and you have not used your insurance, it may be beneficial to pay a much cheaper out-of-pocket cost instead of a higher cost with insurance. Towards the beginning of the benefit periodr, it's a gamble because if you don't run it through insurance it won't apply to your deductible and out of pocket maximum. So if you end up having more medical costs later in the year, there are cases where you might end up paying more overall for medical care in a given benefit period.

Sometimes, insurance carriers and/or the provider will be able to give you an estimate of what it will cost if you run through insurance. This is more common and a little more precise when dealing with labs and medical equipment (things where there's more of a set cost). Procedure estimates may be off due to any potential complications or other unknowns.
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stocknoob4111
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Re: Understanding insurance

Post by stocknoob4111 »

The tricky part is getting the cost through insurance upfront as a lot of medical facilities refuse to divulge their negotiated costs so you find out only when you get the bill which is of course way too late to make an informed decision based on price.

I came across this article for instance:

https://www.clarionledger.com/story/new ... 740151002/

Quote:
"For the CT scan alone he was charged $3,878.25 — 11 times the price of the same scan at an outpatient diagnostic facility — after his insurance policy's discount."

In the article it lists that the patient is in Mississippi and was charged almost $4000 for a CAT scan. On MDSave I looked up a CAT scan in Jackson, MS and it's $443 or almost 10 times less: https://www.mdsave.com/p/merit-health-c ... d78afec961

Not only that, it lists that the $443 fee includes the Facility Fees, Physician Interpretation Fees and the MDSave Broker fees. The gap here is absolutely staggering (the hospital is 1000% more for the same exact thing). Also I don't quite understand how 11 times the a-la-carte cash rate represents a insurance "discount".
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