Does Your Family Health Insurance Plan Have Gaps in Coverage?

If you have a good family health insurance plan, but you just got a big bill from the hospital, you naturally want to find out why. It may be a simple mistake - but it's also possible that your insurance plan has coverage gaps that you didn't know about before.

One of the following simple problems may be solved with one phone call:

1. Your insurance company may have made a payment to the physician, but their billing department hasn't posted it yet. Your bill and the check just got crossed in the mail.

2. You gave your insurance information to the receptionist when you signed in, but she didn't give it to the physician's billing office. The doctors and hospitals are separate businesses, and they don't always share information. The provider's phone number is on your bill - give them a quick call to straighten it out.

And then there's the hard answer:

3. You really owe the money. And yes, you have to pay it.

When I worked at a large health insurance company, I received a call from a young father whose child had an accident in the home. The child needed immediate surgery, so the parents took the him to a hospital that was participating with the family's insurance company.

However, the emergency room surgeon was not participating with any insurance company. The parents didn't realize that facilities and physicians have their own, separate contracts with health insurance companies, so they were totally unprepared for the bills they received.

It is extremely common for ER physicians to choose not to participate with insurance companies. After all, the only reason that doctors contract with insurance companies is to increase their business from insured patients - but the insurance companies do limit the amount the doctors can receive for their services.

If the doctor needs the business, the lower fees may be worth it. But ER physicians and other specialists don't need to drum up business - they usually have more patients than they can handle.

Like many ER's in our city, this particular emergency room has no physicians at all on staff who participate with insurance companies.Let's see how this affected this family:

The total surgery bill for this child was over $9,000.00. If the surgeon had been participating with their insurance company, the family would have owed the surgeon less than $34.00. That is not a typo. His insurance plan paid 99% of the amount it would have paid a contracted surgeon. Most plans actually pay a much lower percentage - this family had an unusually good plan through their union.

A non-participating provider does not have to accept what the insurance pays, and this surgeon charged over $6,000.00 more than the insurance company considered a "usual and customary fee." So the family paid the difference.

If you get an unexpectedly high bill from a health care provider, be sure to call the insurance company to see if you can get it straightened out. It may have been a simple mistake. But if your bill came about because of a scenario similar to the one described above, it won't matter how nice your insurance company's customer service specialist may be. There's nothing she can do for you.

The insurance company can't force an independent business to charge you the amount other providers accept for the same service.

But this family is actually lucky. If their family were not insured at all, the ER room and surgical fees would have left them owing over $20,000.00, almost three times what an insurance company would pay for the same services.

How can you tell if this could happen to you? Get out your benefit booklet and go to the 'emergency or urgent care' section. If you see the words "non-participating providers paid x% of billed charges," you don't have a problem. If, however, you see the words "non-participating providers are paid x% of the amount we would pay a contracted provider," the scenario above could happen to you.

Then go to the benefit summary, which is probably near the front of your benefit booklet. If you have a plan that has different benefits for "preferred" and "non-preferred" providers, you'll need to use the lower benefit to see what portion of the bill your insurance company will pay.

Make sure you go to a participating emergency room if you can (emergencies don't always happen near a convenient participating hospital, of course), and then be prepared for higher fees from those physicans and technicians who don't participate with your plan.