As a consumer, it is important to have an understanding of how the services you are receiving are being paid for. In the United States, insurance companies, Medicaid, and Medicare programs strive to assist those in need of mental health services to gain access to these services where they would typically be unavailable due to high costs.
In order to achieve increased access and coverage of services, insurance companies and similar programs establish contracts with service providers to create coverage networks. As a result, providers are considered either "in network" or "out of network". From here, insurance companies and similar programs establish set costs they are willing to cover for individuals seeing providers that are in network. Examples of these shared costs include copays, deductibles, and out-of-pocket maximums. For a detailed breakdown of these cost share programs and definition you can read our article on figuring out what costs your insurance will cover.
With this structure in place, providers are in need of submitting claims to your insurance company in order to receive payment for services that are being provided to you. When a provider submits a claim to an insurance provider they are having to provide:
Date of service
Place of service
How much was paid (co-pay, etc.)
How much the total charge was
Who provided the service
Claims are then processed by the insurer by checking if the provider was in or out of network, whether any deductibles or copays apply, whether your insurance coverage was active, or if a prior authorization was needed before the service was provided. Insurers will also identify if the claim falls within any limits your plan may have for coverage such as how long a therapy session is, how many sessions per day or week, or a maximum number of treatments for your coverage year. After evaluating the insurance claim, the insurance company will either pay the claim, deny the claim, reject the claim, or identify it as being under a deductible.
Paid claim:
When an insurer sends a claim back as being paid, they will send both the provider, and the member an explanation of benefits (EOB). On the explanation of benefits it will show how much the insurer paid for the services, the date of service, any member responsibilities that were paid (i.e., copays), and the cost of the service reported by the provider.
Denied claim:
Common reasons for a claim being denied include, there being no active insurance coverage, insurance premiums not being paid by the member, a prior-authorization was not requested from the insurance, or the provider is considered out of network. When an insurer denies a claim, the EOB will show the date of service, the cost reported by the provider, and reason for the claim being denied.
Rejected claim:
Claims are often rejected by insurers due to providers submitting a duplicate of a previous claim, a member not being eligible for coverage of services, provider ID numbers are either missing from the form or are invalid, or a diagnosis on the claim is not covered by the insurer.
Marked as deductible:
A claim may be marked as deductible because your insurance plan’s deductible or out of pocket maximum has not been reached. When a claim is marked as deductible, an EOB will be received by the member and the provider showing the date of service, the cost of the service reported by the provider, and any member responsibilities for payment.
Once a provider has received the EOB from the insurer, they will create an invoice appropriately billing the member. Insurers can take up to 30 days to process an insurance claim and generate an EOB for the provider and member. As a result, it is important to have open and consistent communication with the billing department of your mental health providers to make sure you have a clear understanding of your insurance coverage and what costs you should be expected to cover.
You can request an Estimate of Benefits to ensure that your insurance coverage is active and get a report listing the costs your insurance states they expect you to cover for your visit. For more specific information about your mental health benefits, you can call your insurance company's member services number on the back of your insurance card. Additionally, it is highly recommended that if you know you have a change in your insurance coming let the billing department of your mental health provider know as soon as possible.
For more information about insurance coverage you can check out our other insurance blog posts here. If you have a question about billing at Calming Wind Counseling you can email billing@calmingwindcounseling.com or call 804-416-5052 ext. 2.