Why should you care to understand the process involved in creating and processing a medical claim? Because the elements of that process directly impact how much you might have to pay for those services.
Medical claims consist of two key pieces: procedure codes and diagnosis codes. A procedure code is a number that represents the particular service rendered. If you have a visit with a doctor, that provider chooses from a variety of procedure codes that best describes that visit. There are specific codes to reflect if you are a new or returning patient, if you are being seen on a consultative basis, or if you are being seen for a yearly well-visit check-up. Additionally, these codes further delineate the complexity of that visit which includes, among other factors, the amount of time the physician and staff spent with the patient.
In addition to the visit, other services might be provided as well, and there are codes for each of those services. Other services include any testing performed, any vaccinations provided, and any other health assessments made such as mental health, smoking status, nutrition counseling, to name a few.
Each procedure code is accompanied by one or more diagnosis codes that describes the reason for and findings of that service. Procedure codes and diagnosis codes must match accordingly. For example, if a doctor bills an EKG procedure with a diagnosis of strep throat, the EKG procedure may be denied by the insurer for being billed with an incorrect diagnosis, because a doctor would not normally conduct an EKG specifically because a patient complained of a sore throat.
Additionally, there are other supplemental codes called modifiers that further explain the relationship between the procedures. These are required in order for each procedure to be paid separately, rather than be bundled together with another code, resulting in reduced payment to the doctor or facility. On top of this, there are numbers to reflect where the services were provided ( i.e., in a doctor’s office, in a hospital, in an emergency room, etc.,) and to identify who actually provided the service.
If and when any or all of these elements don’t match up appropriately, the insurer often denies the claim or a portion of that claim. If that provider doesn’t correct those errors, then the balance remaining after the insurer has made its payment may be transferred to the patient as his/her responsibility to pay.
THIS IS WHERE YOU, THE PATIENT, NEED TO PAY ATTENTION OR RISK HAVING TO PAY FOR AN INFLATED, UNNECESSARY, OR INCORRECTLY PROCESSED CLAIM.
When this happens, your first step is to review the details of the bill and compare it to the claim that was submitted to your insurer. It would be a mistake to assume that the balances billed to you are correct, or to ignore the bill as being a mistake. This forensic process should uncover services that were billed or processed in error, or balances that were inappropriately applied to your deductible. This process is often time-consuming and complicated since it is likely that you will need to speak to the billing provider as well as the insurer, and each side could likely contradict the response from the other side. This is where seeking medical bill assistance from a knowledgeable medical claims advocate can be of value. Aside from removing the burden and stress of the process from your shoulders, patient advocates are typically very adept at negotiating medical bills and thereby, reducing medical bill costs.