Insurers Hit the Mentally Ill Hardest: Here's How to Defend Yourself

In today's society, every one is out to make a buck. This includes health insurance companies. We as a society pay for insurance as a part of everyday life; it's taken out of our paychecks by employers. We have little choice but to pay. It is for our own good, isn't it? The great paper chase has lead to many people being bullied into thinking they are wrong, when in fact, they are right. Legal jargon and internal reviews are just two of the ways that insurance companies defeat the public at large. The people who are the worst off in these cases are the mentally ill and/or the cognitively challenged. A clear explanation of coverage often lacks, and as a result, consumers are vulnerable.

First, let me tell you a little about myself. I am not an employee of any insurance company so the process I will present is that viewed through the eyes of an informed consumer. I as a consumer, consider myself to pretty intelligent, in spite of my own mental illness. I have experienced in many facets of mental health spanning from billing claims, viewing explanation of benefits, to receiving services and receiving responses to questions posed to the insurance company. For the past five years, I have done insurance verification and for the past three I additionally did billing for a mental health agency. I consider myself to have a pretty vast realm of experience in these arenas. I am well versed in the terminology used by insurance companies and the disclaimers they issue during verification of benefits. I have come across far more than a few responses from insurance companies.

As far as my own mental illness, I have what is termed double depression, an overlap of dysthymic disorder (a milder yet chronic form of depression) and major depression recurrent. When the major depression remises I am left still mildly depressed. My own treatment has been comprised of outpatient psychotherapy, psychotropic medication management as well as inpatient hospitalization. I have been down what I think is every avenue of traditional treatment options. I have also had my share of insurance and billing issues along the way, the latest of which has prompted this writing. Needless to say, I sympathize with those who are less able to navigate the channels set forth by insurance companies. I know from experience that it can be very intimidating to take on or even question an insurance company. Therefore, if this article helps even one person it is well worth it to me.

With the information provided here, I hope others will feel more comfortable and knowledgeable about their insurance. Enough so that they can stand up for themselves and get what they rightfully deserve. I mention above that the worst off are the mentally ill and/or cognitively challenged also should be included is the elderly. The reasons for this, well there are many. First, often times these individuals lack the self-confidence to believe they are right. Second, they may lack the skills to ask assertively for what deserved. Lastly, they may be lost in the jargon of the industry. This is purely speculation on my part, but in my experience, it stands to reason. My intent is purely to educate the public at large.

It's important to understand the insurance coverage you have. A list of common insurance terms is provided at the end of this article along with user-friendly definitions. Insurance varies from person to person but there are a few hard and fast rules. It should be noted that deductibles and co-pays cannot be waived or reduced. The same is said of out-of-pocket maximums. These amounts are set by your insurance plan. For our purposes, we will include the deductible (this is not always the case, as it varies by policy) in the out-of-pocket maximum. For this example, we'll use a deductible of $500 for in-network providers, no co-pay, a 50% co-insurance, and an out-of-pocket maximum of $2000. In most clinics, the co-insurance is the consumer's responsibility. There are exceptions when the co-insurance can be reduced at the discretion of the clinic. For our purposes, we'll assume that the clinician does not reduce co-insurance amounts. As outlined earlier the consumer is responsible for the first $500 during the plan year of any treatment, usually combined medical and mental health. Once the deductible has been reached, the co-insurance and out-of-pocket maximum amounts come into play.

We'll use the simplest case first. Start by finding a provider. Most, if not all, companies have preferred providers, with whom they have contracts. I would encourage consumers to contact their insurance company, to receive a list of in-network providers. With the list of providers, the consumer can call and schedule an appointment. At the first appointment, the consumer receives information about the clinic's fees, other policies and expectations for treatment. Most important information during this appointment for our purposes is the information regarding the fees. This is when the clinician discusses the policies of the clinic regarding payments and/or payment arrangements. It's important to understand the policies. Once you sign the agreement, you are responsible for understanding the policy. If you have questions, ask, ask, and ask, until you understand.

After your appointment, the clinic will send a claim to your insurance for payment. The insurance company's claims department considers the claim and applies the policies set forth in your plan. It is the claims department that applies contractual amounts, applies charges to deductible, and once the deductible has been met, determines how much is paid to the provider. Once these determinations have been made the payment is made to the provider, and an explanation of benefits is generated and sent to the consumer.

It's important to be an informed consumer; however, you may not know what your portion of the treatment will cost. Our example, uses a 50% co-insurance, this means that the consumer is responsible for 50% of the contracted amount of treatment after the deductible has been paid. This is quite ambiguous, because as the consumer you don't know the contracted amount of treatment. In my experience, the contracted amount varies by insurance company and by provider type. For example, an insurance company will usually pay more to psychologist than to a master level clinician. Similarly, they will pay more to a physician (psychiatrist) than either a psychologist or master level clinician.

When you receive your explanation of benefits (EOB) from your insurance, be sure to look at it critically. Even if you haven't met your deductible, there are some things you can find out about your cost of treatment. Look at the claim for your treatment; even if you haven't met your deductible, the insurance company should apply a provider discount. This discount should allow you to calculate the total liability for that treatment. Since the first visit, intake is usually billed at a higher dollar amount by the clinic, and sometimes paid at a higher rate by the insurance it is more beneficial to look at the second treatment date. Looking at your second treatment date will help you most accurately determine cost of treatment. Your explanation of benefits contains a lot of useful information. First, it allows you to keep a record of your treatment dates. Be sure that these dates correspond to your actual treatment dates; this helps prevent insurance fraud. Next, you should be able to locate the amount that your provider billed the insurance company. This amount should seem familiar, as it is supposed to match the amount on the fee agreement you signed at the onset of treatment. As stated earlier, even if your deductible has yet to be satisfied the insurance company should apply a discount for using an in-network provider. Sometimes, this is notated by terms like provider discount, or allowable amount, and sometimes also adjustments. This is the amount that will be applied to a yet to be met deductible, and the co-insurance percentages. On most EOB's there is section that indicates the balances of accumulated out-of-pocket and deductibles.

Here is an example: your provider bills $140 for one-hour psychotherapy, the insurance allows $60 per hour. Your EOB should show $140 as the "billed amount," an adjustment of $80, and an allowable amount of $60. If your deductible has yet to be satisfied, the "patient portion" should also be $60. Once your deductible has been met, in our example, the "patient portion" should be $30, or 50% of ($60) the allowable amount. Your patient portions accumulate toward your out-of-pocket maximum.

Once your out-of-pocket maximum has been met, in our example, after you've accumulated $2000 from your deductible, co-pays and co-insurance, your coverage will increase to 100%. Therefore, for a one-hour psychotherapy session, your EOB should reflect a payment to the provider of $60, the allowable amount, and a patient portion of $0.

Sometimes though things go wrong, the above example outlines a fairytale example. The example, assumes everything is handled properly and correctly. We live in the real world however, when people are fallible. When things aren't handled correctly, it is the consumer's responsibility to ask for review. When a consumer asks for a review, the insurance company performs a review of their decision. Herein lays the problem. The insurance company is in business to make money, just like any business. How can consumers be sure that they are getting the benefits they are entitled. Consumer, beware.

By being informed and aware of your benefits you can assure you aren't slighted by your insurance. By being aware of your benefits and looking at your EOBs, you can provide your own system of checks and balances. In addition, being aware allows you to know when the insurance has made an error. This happens more than you may think. It's easy for the insurance representative to make you think you've made a mistake, or misunderstood. As long as you know what you are entitled, you should be able to see if you've made an error or if the insurance has erred. Be sure of yourself, keep tabs on your benefit balances, and don't allow yourself to be bullied into believing you are wrong. I am trying to hold back cynicism, but insurance is a business out to make money and any opportunity to save money will be taken.

Earlier we discussed the process of a claim in a perfect system. Now, let's discuss some things that can go wrong. There are a number of errors that can occur. First, let's look at a problem involving network status of a provider. In keeping with our earlier example, the consumer is seeing an in-network provider. One thing that could happen is that the provider is in-network but the benefit is paid as if they were out-of-network provider. This results in a higher consumer financial responsibility. Another example can occur when the in-network status is correct, but the balance is applied to an out-of-network deductible or out-of-pocket maximum. This also results in a higher financial responsibility. For clarification purposes, out-of-network deductibles and maximums are usually higher than in-network amounts. In some cases, the out-of-network amounts include the in-network amounts. From our earlier example, the in-network deductible was $500, and the out-of-pocket maximum was $2000. If the balances are combined, and the out-of-network deductible is $1000, then the total annual deductible is no more than $1000. When seeing an out-of-network provider the consumer must satisfy an additional $500 deductible. Additionally, the consumer will need to satisfy an additional out-of-pocket amount for out-of-network providers. As a consumer, this may be confusing, and to many it is confusing. Take a moment and reread this section if you are confused. It is crucial to understand, because only if you fully understand the "lingo" can you pose intelligent questions to your insurance company. Further, you will have a better feel for if you are getting a reasonable answer to your inquiry.

When things go wrong with a claim, what is a consumer to do? Well, first, the consumer should be aware and informed of the policy and its provisions. Basically, know your coverage. Once reasonably sure the claim has been processed incorrectly, a consumer can call the insurance company and request information about a claim. Sometimes, there is a simple explanation to a consumer question. Other times, however, the consumer needs to request a re-examination of the claim. This is one of the "internal" reviews. The claim gets sent through the processing channels for a second time looking for errors made the first time around. So basically, a consumer is resubmitting a claim and hoping for a different outcome than they received the first time. In my experience, the claims department isn't very good at picking up their own errors. If after the second review, a consumer feels that a claim has been handled improperly, a written appeal needs to be submitted. Here is when the consumer can write just what was done improperly in the handling of the claim. Unfortunately, based on my experience, when the claim is resubmitted during the first review, there is now verbal direction or written explanation of why it is being disputed. This is why, I think, the error is not detected. Using the insurance company's appeal form the consumer is able to spell out what the error was. This should help to resolve the error. One problem with this process is the insurance company can use up to 30 days to review and make a decision on the appeal. During this time, a consumer will likely receive billing statements from providers. For this reason, it is prudent to inform providers of any appeal action being taken. Simply let them know you dispute the insurance company's decision and assure them your not paying is not an attempt to short change them but instead allowing you to get an answer from the insurance that makes reasonable sense. I suggest making a copy of any appeal and providing it to the service provider as proof of the dispute. This allows your provider to see that you, as a consumer, are being proactive about your balance and not simply neglecting to pay them.

It is important to note that a provider can also file appeals for insurance decisions they dispute. If this is the case, a consumer may receive a letter from the insurance company stating they received the appeal and the outcome. One would hope that the provider's office would let the consumer know they are filing an appeal. In my experience, providers don't always let the consumer know what is going on. As in my experience, this lack of communication should be a red flag. If an appeal is filed by a provider and it is denied, this may mean that the consumer has a higher than anticipated financial obligation. This situation is one of the darkest alleys I encountered during my furlough through the treatment process. Again, consumers beware.

Deductible- a set dollar amount established for an insurance plan that must be satisfied before benefits are paid (cannot be waived or reduced)

Out-of-pocket maximum- a set dollar amount established by your insurance plan that limits the consumer liability for a plan year, sometimes called a stop-loss

Co-insurance- a percentage that indicates consumer responsibility for coverage (can be reduced at the discretion of the clinic)

Co-pay- a set dollar amount that is the consumer responsibility for each office visit, established for an insurance plan (cannot be waived or reduced)

In-network provider- a provider that has been contracted with the insurance company

Non-network provider- a provider that has not contracted with the insurance company, also called out-of-network

EOB- (explanation of benefits) a document generated by the insurance company designed to inform the consumer of what services have been billed, what has been paid to providers, and what amount may be the consumer responsibility, also reasons for denial or benefit decisions