Health Insurance Companies Take Advantage of Doctors, Part II

I’ve posted previously on how tough insurance companies can make it for doctors to collect their payments. Those of you in the profession know what I am talking about and are probably familiar with the acronym “EOB.” The EOB is the “Explanation of Benefits” that insurance companies provide to their patients and physicians.

If you are a patient, you probably only look to the bottom line or the far right which shows how much you owe the provider that the insurance company does not cover. You probably clearly overlook the fact that the amount paid by the insurance company is much less than what is billed by the doctor. When a physician provider receives the EOB, it looks a little different from the patient’s: there is usually an explanation of why the claim was not paid fully and/or why the claim was denied.

Unfortunately, the insurance companies have expertise in being as opaque and confusing as possible – the language in these explanations involves a mixture of legalese and what many of us would call “B.S.” It is the kind of language that confuses doctors and office staff and usually is only understood by the billing specialist at the insurance company. Additionally, it is a canned response by the insurance company computer system. Essentially, their computers flag certain errors or omissions and then send the generic computer response that is meant to deter the physician from resubmission or chasing the collection.

In a weak effort to provide some evidence behind my strong opinions, I found this article dated in August 2008 from the North County Gazette in New York. This is in reference to a health insurance company being fined $600,000 for failure to provide EOBs or adequate explanation of EOB denials to patients with their coverage. Interestingly, I could not find an example of a health insurance company being fined for providing inadequate EOBs to providers.

As I mentioned previously, the problem lies in the fact that the provider is good at his profession: providing medical care. He is not trained in how to maximize medical billing and how to chase down insurance companies to make sure they pay what they owe. It is a sad state of affairs and is actually a major reason why many new providers are opting to join a large managed care organization such as Kaiser Permanente, where they do not have to worry about scheduling, billing, EOBs, and human resources.

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