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Proof of Medical Necessity; insurance
reimbursement |
Insurance reimbursement usually requires proof of medical necessity and proof of coverage. Most insurers have a general statement that they will cover necessary blood tests. Thus, most patients may have an enforceable right to obtain reimbursement for necessary blood tests.
However, the insurer may claim that a test is not necessary, it is "experimental", it is not part of the usual practice of medicine, or it may simple deny coverage and force the patient to proceed through a complex and difficult appeals process.
To survive this process you need to be well prepared, know the rules, and have appropriate documentation. The following ideas may help, but beware that there are constant changes in this area and we may have omitted material facts or have incorrect statements.
The process of ordering tests
Different services and products are involved:
Diagnosis. The treating doctor or
provider who orders the test. To order the test, he must have a diagnosis and
show the test is medically necessary for diagnosis or treatment. In the past,
doctors used to order tests to "Rule Out" a particular condition.
Today, the words "rule out" may be interpreted by insurers as "not
having a diagnosis" or "not having a disease" and therefore the
test is considered for preventing purposes. Most insurers cover very few,
simple and inexpensive preventive blood tests.
Nutrition counsel. Nutritionists that
counsel the patient on diet, treatment. Most insurers do not cover these
services unless the nutritionist works under the direct supervision of a doctor
who bills for his services. As a result, if you see a nutritionist at the same
time you see the doctor, it may be considered one office visit and the doctor
receives trivial reimbursement.
Lab certification. The lab performing
the test must be qualified to perform the test for clinical purposes.
Laboratories have great flexibility to do tests for research purposes, but
those tests cannot be reimbursed by insurance (exceptions sometimes exist). The
test and the lab must have been inspected by the state inspection services. Due
to complexities in the law, many states do not approve labs in other states and
it may not be possible to obtain reimbursement for a blood test done outside your
state. Most specialized tests are done in a few laboratories. It is too
expensive and complex and often extremely difficult for a lab to be licensed by
many states. Without a license, an insurer has a great excuse for not
reimbursing the test. Specimen submission is simple: doctors or hospital labs
or other labs draw the blood and send it by mail to the lab that analyzes the
blood.
Interpretation and treatment. Complex
test results are difficult to interpret. You will likely need consultation
services to interpret test results. Often this is done by your doctor or
nutritionist, who calls the lab and ask it to explain the test results. Based
on the interpretation of all the tests and clinical exams, the doctor
prescribes a treatment. When the treatment involves complex nutrition, it is
best to discuss the treatment with an experienced nutritionist.
Follow up. Once the test results are
in, and you have been treated for a while, the doctor will see you again,
perhaps order more tests for follow up. Sometimes the first test may not be
covered by insurance, but if the patient is abnormal, further tests may be
covered or you can make a case for coverage.
The doctor and the patient must
decide whether they want the blood test and medical service eligible for
insurance coverage
The decision on whether or not to seek insurance coverage is critical. Health providers who agree to insurance coverage may be limited in the amount they can charge. Most of the time, this amount is so small that it makes it impractical to practice medicine.
This determination is different for different insurance companies, and may be different from tax deductibility of expenses (you may be able to deduct your medical expenses even if not eligible for insurance coverage). A separate determination is made for each type of service/product. The determination is complex and has wide implications. You should learn about them.
If the service is covered by insurance, the patient may be eligible for reimbursement, the lab may be forced to accept assignment, the providers may have to accept the amounts determined by the insurer. If the service/product is not covered by insurance, it may be necessary for the patient and provider to enter into a "private agreement" whereby the patient is informed that the service/product is not covered by insurance. This private agreement may not require the provider to terminate his/her membership with the insurer (i.e., Medicare). Sometimes the provider must terminate his/her insurance agreement to enter into private agreements with patients. In general, patients do not lose insurance by entering into private agreements and do not need to inform their insurer.
If the services/products are not covered, then the limits of payment may not apply. Distinguish this situation from a case where the services are covered, but the provider chooses to terminate his/her relationship with the insurer (i.e., Medicare) and all patients are treated as private contracts outside the insurance. In this case, the provider can usually charge what he/she considers appropriate.
The main advantage to the provider if the service is not covered by insurance is that he/she can charge what he/she considers reasonable and can therefore spend additional time to help the patient. Providers may want to offer a new service for prevention and optional diagnosis and treatment for patients who want the extra services involved. The patient pays directly. The amounts paid may be tax deductible. If the patient works for a corporation, the corporation could pay for the expenses and be tax deductible. Other arrangements include enrolling the patient in a research project and paying for it or making a tax donation to a research foundation and enrolling in a research project. These approaches may become available in the future.
The disadvantage to the patient is that he/she must pay and is not reimbursed by insurance. For patients covered by Medicare/Medicaid, the service may not be covered and reimbursement may be impossible. However, the service may be covered for people enrolled in other programs, or by appeal to the HMO. These issues are not yet resolved.
Patients can chose to purchase inexpensive insurance that covers only for major expenses, and use the saved money to pay for what they want.
This approach works best for the patient who has a complex condition and wants new options and more time with the provider and is willing to pay for the time and tests and special oils/ foods needed.
Proper records must be kept of
medical necessity
If any claim will be made for insurance reimbursement or tax deductions, it is best to record the care received. The doctor may write a note in the medical record documenting why the test, services/ products are needed. The patient should sign a form indicating his/her consent for the diagnosis/ treatment.
Best approach is to have a preprinted form combining consent with description of medical necessity. Such form will soon be available here.
The note could state:
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Patient appears to suffer from Essential Fat abnormalities. Recommended the fatty acid profile EFA-SRä for evaluation, diagnosis, and likely treatment with special mixtures of essential fats. Patient informed and agrees that the services provided are different from those covered by his/her insurance, they are not covered by his/her insurance. Patient agrees to pay for them directly to the provider _________. |
Prototype letters
Prototype letters to complain about reimbursement and appeal denial of medical benefits for blood test. It is possible for the blood test to be covered by insurance, but the additional work by the nutritionists or provider is not covered.
Reasons claims are denied
Mistakes
Health programs and insurers often make mistakes in denying claims. Each state has specific laws pertaining to insurance (including health insurance) that require insurers to promptly process claims and provide adequate explanation for denials. However, in our experience denials are often very difficult to understand or make little sense. Trying to get an explanation by mail is often impossible. We sent many letters of inquiries to insurers and rarely get a meaningful reply. You must call them, get the name of a person to assume responsibility, insist compliance with state laws, and persist. Small claims court are an excellent alternative when you have a good claim and the insurer does not provide adequate responses.
Common errors
The doctor who sent to form used the wrong diagnostic code, individual code, etc. Quite a few times the companies who do billing on behalf of doctors, hospitals, etc. incorporate incorrect information. Sometimes you cannot reach them by mail and they will not respond to your inquiries. Again, get a person. Explain, in writing, that you assume you owe nothing (if it is a bill) or they agreed to reimburse you unless they explain otherwise.
Many
policies will not reimburse for preexisting conditions. This clause may provide
an easy way out to void payment. We all have pre-existing conditions form the
day we were born. Many policies have a 12 or 24 months after which the
pre-existing conditions clause no longer applies. Fight it tooth and nails.
Processing
errors are quite common. Read your notices carefully, and call the insurer.
Beware of
rejections because the test, procedures, etc. was not medically necessary. It
is the doctor's responsibility to properly document in your files that the
test, procedures, etc. is medically necessary. The documentation should
accompany your appeal. See our prototype letter for fatty acid profiles.
The
benefit is not covered is usually the best strategy by the insurer to reject a
claim. This approach is often used with so called "experimental
therapies". Your strategy is to prove that what you have done was
medically necessary and lead to a different diagnosis or treatment that
improved your outcome. Then explain that failure to do what was done would
subject the doctor to liability and would be inappropriate. Find the section of
your contract that shows that these kind of events are covered by your policy.
Write a comprehensive letter and keep it in case you need to go to small claims
court.
The best
strategy is to claim that you used a provider that was not part of your network
or that was not approved by your PCP (primary care provider). Your best
strategy is to seek reimbursement under the procedures that apply for out of
network or lack of referral situations. Also read about exceptions that may
cover your expenses.
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© 1998 Edward N. Siguel.
All rights reserved |
modified 1/15/00 |