Difficulties of Dealing with Health Insurance Companies for Claims & Benefits

Part 1: The Basic Tools, Chapter 2: Understanding the Language of Health Insurance Page 8

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This case is a good illustration of the difficulties involved in understanding the meaning of the technical terms and phrases sometimes used by insurers to communicate with consumers, and of the need for consumers to understand the meaning of as many technical terms and phrases as possible. Although this particular problem was easily solved, it's not always possible to find a solution to a major health insurance problem so quickly, or to persuade an insurance company of the need to change its claim-processing procedures. Fortunately, the cooperation of the doctor, the hospital representatives, and the insurance company supervisors and executives involved in the case made that kind of solution possible.

In addition to the confusion that results from the use of technical terminology at times some insurance companies also seem to have difficulty communicating basic information to consumers. For example, I helped a reader solve a problem several years ago that involved a claim for ambulance service. The patient was covered by Medicare and by a secondary in surance policy. Medicare had paid a large portion of the cost of the ambulance service, but the secondary insurer had declined to pay the difference -- approximately $150 -- between the Medicare payment and the original bill. The secondary insurer's explanation for declining to provide payment was that "maximum benefits" had already been provided for "hospital charges" under the "hospital service plan." In addition, the letter of explanation from the insurer claimed that the policy did not provide coverage for ambulance service.

I found the insurer's explanations so confusing that I had to call an executive at the insurance company to review the technical terms that the company was using. As it turned out, although the letter of explanation from the insurer stated that the policy did not cover ambulance service, the policy did in fact provide coverage for such services. In addition, the phrase "maximum benefits" referred to the Medicare payment, not to a payment by the secondary insurer, "hospital charges" referred to ambulance service, and "hospital service plan" referred to Medicare.

As I eventually discovered, what the insurer meant to communicate was that the policy provided for payment for ambulance service only up to a specific amount. Since the Medicare payment had already exceeded that amount, the secondary insurer was not obligated under the policy to make any ad ditional payments. Apparently, if Medicare had not made a payment, the secondary insurer would have done so, up to the limit provided by the policy.

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