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Resolving Health Care Insurance Disputes

Health Insurance Consumer Action Guide Resolving Health Care Insurance Disputes

The Indiana Department of Insurance is pleased to present you with this brochure. It will help you understand how health insurance works and what you can do to protect yourself in a dispute with a health insurer. Information on how to contact the Indiana Department of Insurance appears at the end of the brochure.

The Scope of State Insurance Regulation

State insurance regulation of health insurance covers millions of Americans. The health insurance regulatory breakdown for Americans is as follows:

  • State regulation. Some employer or employee groups purchase health insurance coverage from an insurance company. Others may purchase group health coverage from a health maintenance organization (HMO). Both are called fully insured health benefit plans. The Indiana Department of Insurance regulates Indiana insurers of such plans.
  • Federal regulation. Some employer or employee groups provide what are called self-funded health benefit plans. This means an employer or employee group may set aside funds and employee premiums each month to pay health coverage claims submitted to the plan. If the plan is self-funded and offered by a private sector employer or bona fide union, the designated regulatory authority is the U.S. Department of Labor’s (DOL) Pension and Welfare Benefits Administration.

Sometimes self-funded health benefit plans are confused with fully insured benefit plans. Employers often hire an insurance company, an HMO, or a third party administrator to process claims for a self-funded health benefit plan. If you do not know what kind of plan you have, review any written plan information you have been given. If you are still uncertain, ask your employer or plan administrator.

Understanding Types of Health Insurance

Each year, fewer and fewer Americans are covered under traditional fee-for-service health insurance plans, in which insured individuals go to a doctor of their choosing and then submit health insurance claims. Today, more and more Americans are covered by one of the following arrangements:

  • Health Maintenance Organization (HMO). An HMO provides health services through a network of doctors, hospitals, laboratories, etc. The health care providers may either be HMO employees or have some other contract arrangement with the HMO. HMO plans pay providers a monthly set amount (a capitation fee) regardless of the amount of services performed. When you enroll in an HMO, you choose one of the doctors as your primary care physician (PCP) to manage all of your health care. Whenever you need health care, you first consult your primary care physician. Your PCP may refer you to an HMO-approved specialist.
  • Preferred Provider Organization (PPO). A PPO is a group of doctors, hospitals, and other health care providers (preferred providers) who have agreed to provide services to members of a health plan for discounted fees. Some employers combine the PPO with a traditional major medical plan so you can use providers who are not on the PPOs preferred list. But to encourage you to use a provider who is on the PPO list, you will usually have lower out-of-pocket expenses than if you use a provider who is not on the list.
  • Point of Service Plans. These plans are essentially HMOs that allow members to use services provided outside of the network without prior approval from a network doctor. Point of service plans offer lower deductibles and no coinsurance for visits to doctors inside the network. Visits outside the network normally require the payment of deductibles and coinsurance the same as a standard insurance policy.

Checking Out a Health Insurance Provider

Before you buy health coverage, find out about the company selling the plan. Here are factors to consider:

  • Customer Service. Find out how the company services its policyholders. Does the company have a toll-free customer service number?
  • Complaint History. Has the company had an unusually high number of consumer complaints?
  • Licensing Status. Call your state insurance department to find out if the insurance company is licensed to do business in your State.
  • Cost. Premiums for health insurance will vary greatly because there are no standard plans. When you look at bids from several companies, you will also need to look carefully at the benefits offered. Also, keep in mind that the actual cost for your health coverage will be determined after you submit information about your health.
  • Financial Stability. Financial stability helps ensure that a company can pay its claims. Your state insurance department establishes requirements that each company must follow and continually monitors the financial stability of insurance companies operating in the state. Independent organizations also rate the financial stability of insurance companies. Remember these ratings are opinions only and do not guarantee that a company is financially sound. Your public library may have published ratings from these sources. Your insurance agent or broker may also have this information.

Questions to Ask When Shopping for Health Care

About Coverage

  • What does the plan pay for?
  • What does the plan not pay for/exclude?
  • What are the limits on pre-existing medical conditions?
  • Will the plan pay for preventive care, immunizations, well-baby care, substance abuse, organ transplants, vision care, dental care, infertility treatment, durable medical equipment, or chiropractic care?
  • Will the plan pay for prescriptions?
  • Does the plan have mental health benefits?
  • Will the plan pay for long term physical therapy?

About Premiums

  • Do rates increase as you age?
  • How often can rates be changed?
  • How much do you have to pay when you receive health care services (copayments and deductibles)?
  • Are there any limits on how much you must pay for health care services you receive (out-of-pocket maximums)?
  • Are there any limits on the number of times you may receive a service (lifetime maximums or annual benefit caps)?

About Customer Service

  • Has the company had an unusually high number of consumer complaints?
  • What happens when you call the company's consumer complaint number?
  • How long does it take to reach a real person?

How to Make a Health Insurance Claim or Dispute a Claim Denial

Things to do before you file a claim:

  • Review your policy or employee booklet carefully to be sure the service in question is covered.
  • Follow any managed care rules, including pre-certification requirements and use of network providers.
  • Give claim forms to the provider, with your policy number and other identifying information.

How to submit claim properly:

  • Find out if your provider submits the claim for you or if you need to do it.
  • If you need to do it, review the information to be sure it is complete and correct.
  • File it as soon as you get the bill from the provider.
  • Send it to the right address.
  • Keep a copy for your reference.

Allow reasonable time for company to process your claim. The company should inform you if it needs any additional information to complete the claim. Sometimes, it will request additional information directly from the providers or return the claim form to you to get more information. After the company has all the information it needs, it has a certain number of working days to process your claim. The company must send you an explanation of benefits that explains its decision.

If your claim is paid:

  • If you assigned benefits to the provider, the benefit check will be sent directly to the provider.
  • You will pay any deductibles and co-insurance.
  • If you did not assign the benefits, the check will come to you and you will need to pay your provider(s) for the entire amount.

If your claim is denied:

  • The reason for denial should be stated on your explanation of benefits.
  • If you disagree with the basis stated for denial, check your policy or employee booklet for the company's appeal procedures.
  • The company should be able to answer procedural questions about appeals over the phone.
  • Your appeal should be in writing and may require information from your doctor.

Filing a consumer complaint with the Indiana Department of Insurance:

If you've tried unsuccessfully to resolve a claim problem with your company or agent, contact the Indiana Department of Insurance. Very often, companies will resolve disputes after the Department intervenes on a consumer’s behalf. A formal complaint form is not essential, however, every request for Department assistance must be in writing. It should include the following information to speed processing of your complaint:

  • Include your name, address (with ZIP code), and daytime phone number.
  • Include the name of the company or agent against whom you are complaining.
  • Include your policy number and/or claim number.
  • Include a brief description of the problem and how you think it should be resolved.

It is also helpful if you:

  • Supply any documentation you have to support your case including phone notes.
  • State what has been done to resolve your problem including whom you have talked to and what you were told.
  • For future reference, keep a copy of your letter to the state insurance department.

The address of the Indiana Department of Insurance is:
Consumer Services Division
Indiana Department of Insurance
311 West Washington Street, Suite 300
Indianapolis, IN 46204-2787
Telephone 1-800-622-4461

Complaint forms and additional consumer information are available on the Department’s web site. The address is:

What if You Aren't Protected by Your State?

States are not permitted to regulate most valid self-funded plans authorized by Congress under the terms of the Employee Retirement Income Security Act (ERISA). If the plan is self-funded and offered by a private sector employer or bona fide union, take unresolved complaints to the U.S. Department of Labor (DOL) Pension and Welfare Benefits Administration.

The DOL does not interpret provisions of any particular health benefit plan or require employers to pay claims, but may investigate your complaint. In certain disputes, the DOL suggests personal legal advice may be your only option. The addresses and telephone numbers for the DOL are:

In Northern Indiana

U.S. Department of Labor
Chicago Regional Office
Employee Benefits Security Administration
230 South Dearborn Street, Suite 2160
Chicago, IL 60604
(312) 353-0900

In Southern Indiana

U.S. Department of Labor
Cincinnati Regional Office
Employee Benefits Security Administration
1885 Dixie Highway, Suite 210
Fort Wright, KY 41011-2664
(859) 578-4680

If the plan is self-funded but offered through a government or church employer, follow the appeals procedures outlined in your benefit booklet and other plan documents. In most cases ultimate responsibility for resolving disputes rests with the governing body of the employer sponsoring the plan, such as a school board.

If you have a disability, you may have certain protections available under the Americans with Disabilities Act (ADA) if your self-funded coverage is dropped or limited. You can reach the ADA Technical Assistance Center at 1-800-949-4232 or the U.S. Department of Justice at 1-800-514-0301 (voice) or 1-800-514-0383 (TDD).