A few days ago I received a phone call from an insured asking why the insurance company was unable to tell him whether a claim would be covered or denied. I discovered that the insured had, by mistake, called the Provider Network and not the Claims office. Through talking with several people I learned that the average insured is not aware of the various parts of their insurance and so I thought I would include a blog that hopefully would explain.
A typical insurance plan is made up of several companies that work together to put an insurance plan in place. These consist of an Underwriter, Claims Examiner, Provider Network, Insurance Agent/Broker, and Claims Processor. In some instances all of these parts might be under one insurance company. In other scenarios they are different companies working together. There is no real advantage/disadvantage to the insured.
Basically an insurance underwriter determines whether to extend insurance to an applicant or group of applicants. In most cases the underwriter will also set insurance rates or determine how much an applicant should be charged in premium for the insurance policy. In making these determinations, an underwriter relies on risk management assessments and on surveys of statistical data. The underwriter will view the personal data and information on an applicant and determine whether that individual/group is a worthwhile risk for the company. If the underwriter determines to grant the insurance, he/she will also decide how much that individual/group should pay for the insurance coverage.
When an insured is injured/ill and seeks medical advice/help the doctor/hospital/lab will send a bill to the claims examiner. The claims examiner processes the claim to determine if the bill will be paid or denied. A claims examiner is, to an insurance company, an investigator. The claims examiner investigates whether the claim is legitimate and if so, must also determine if the person that has placed the claim is furnishing the correct information. The claims examiner is able to identify individuals who really need help from those who try to misuse the system. Reviewing a claim requires that the claims examiner has a clear understanding of the insurance policy and can determine if a claim should/should not be rewarded.
Medical insurance claims processors, or adjusters, decide whether an insured's insurance policy covers a particular medical procedure. The claims adjuster looks at each policy's benefits closely to make sure a claim is valid. They also check each new claim to see if the medical procedure is medically necessary and whether the insurance policy covers the procedure.
A Provider Network is a list of doctors, other health care providers and hospitals that an insurance plan has contracted with to provide medical care to the insured. The doctors and hospitals are referred to as "network providers". If a doctor/hospital has not contracted with the plan then they are referred as "out-of-network providers". With some insurance plans, you pay less if you use providers that a part of the plan's network.
Insurance agents help insurance companies generate new business by selling policies to potential customers. An agent explains the insurance policy to the potential customer. Some insurance agents sell policies of several companies and some work directly for a single insurance company.
As you can see, the person that called the Provider Network to obtain information about his claim actually called the wrong department/company. He should have called the claims processor.
Please let us know if this blog was helpful.