What do you do when you are presented with a patient who needs treatment but the patient’s insurance company will not pay for the services? Can you provide the services anyway? Who will pay for them? How do you collect payment for such services?
If the patient consents to receive the services in spite of the insurance company’s refusal to pay for such services, you will likely be able to bill the patient directly. However, in order to do so, there are certain requirements that you must satisfy.
Reason for Non-Coverage
Several reasons exist for why a particular service may not be covered by Medicare, Medicaid or a commercial insurance provider. Medicare specifically identifies four categories of items and services that are not covered, which are generally applicable to commercial payers as well. The four categories are:
- Services that are not medically reasonable and necessary;
- Non-covered services;
- Services denied as bundled or included in the basic allowance of another service; and
- Services reimbursable by other organizations or furnished without charge.
With respect to the first category, services that are not medically reasonable and necessary to the patient’s overall diagnosis and treatment are not covered. To be considered medically necessary, the services must meet specific criteria defined by national coverage determinations and local coverage determinations. For each service billed, you must identify the specific patient symptom or complaint that necessitates the service.
Concerning the second category, some services are just not covered by certain payers. These include, but are not limited to, services furnished outside the U.S., certain routine physical checkups, eye examinations, eyeglasses and lenses, hearing aids and examinations, certain immunizations, personal comfort items and services, custodial care, and cosmetic surgery.
Regarding the third category, services that are denied as bundled or included in the basic allowance of another service include fragmented services that are part of the basic allowance of the initial service, in addition to prolonged care, physician standby services, certain case management services and supplies included in the basic allowance of a procedure.
In relation to category four, some services are reimbursable under automobile, no-fault or liability insurance, or workers’ compensation programs and, therefore, are not covered by Medicare. Also, payment will not be made for the following: certain services authorized or paid by a government entity; services for which the patient, another individual or an organization has no legal obligation to pay for or furnish (e.g., X-rays or immunizations gratuitously furnished to patient without regard to patient’s ability to pay and without expectation of payment from any source); defective medical equipment; medical devices under warranty if they are replaced free of charge by the warrantor; or if an acceptable replacement could have been obtained free of charge under the warranty but was purchased instead.