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Common Insurance Denials

Have you received a denial of coverage from your insurance plan? By understanding common denial types you can proactively reduce potential denials, and help ensure lower out-of-pocket expenses. This article will explain the Coordination of Benefits process when using multiple insurance policies, and walk you through common denial scenarios.

 

Overview

Coordination of Benefits (COB), no active coverage, and retro termed covered, are common insurance company denial types that may result in higher out-of-pocket client expenses. It is important to keep all your insurance records up-to-date and accurate. Remember if you have a secondary insurance plan, please email us at support@rula.com - additionally, if you are aware of a change in insurance / new plan it is your responsibility to inform Rula of this change by updating insurance information via the patient portal or by sending an email to support@rula.com.

 

Coordination of Benefits (COB) 

Coordination of benefits (COB) is the process used by health insurance companies to determine which plan pays first when a patient is covered by multiple (dual) health insurance policies.

 

What is Coordination of Benefits?

COB establishes the order in which insurance companies pay claims when a patient has coverage from more than one health plan. This prevents duplicate payments for the same medical services.

The primary payer is the insurance plan that pays claims first, up to the limits of its coverage. The secondary payer then covers any remaining eligible costs, up to the limits of its plan.

 

Why is COB Important?

COB is crucial for patients with multiple insurance policies to minimize out-of-pocket expenses by ensuring proper coverage and streamlining the claims process for healthcare providers. 

 

How Does COB Work?

Patients inform all healthcare providers and insurance companies about their multiple coverages. Insurance companies determine the order of primary and secondary payers based on specific rules. 

The coordination of benefits (COB) rules determine the order in which insurance plans pay claims when a person is covered by more than one plan. Here are some key COB rules:

  • The plan that covers the person as an employee or primary policyholder is primary, while the plan that covers them as a dependent is secondary.
  • For dependent children, the plan of the parent whose birthday comes earlier in the calendar year is primary. If the parents are divorced/separated, the plan of the parent with custody is primary.
  • For active employees covered by their employer's plan and Medicare, the employer plan is primary if the employer has 20 or more employees.
  • If a person is covered as an active employee and also has COBRA continuation coverage, the active employee plan is primary.
  • If none of the above rules determine order, the plan that has covered the person longer is primary. 

Oftentimes when a denial is received it is the client’s responsibility to reach out to their insurance company in a timely manner to update their coordination of benefits so insurance can reprocess claims. 

 

Not active insurance

There are a few scenarios where your services may be denied for inactive coverage:

  • Providing Incorrect Insurance Information: If you provide incorrect insurance details during registration, your claims will be denied as the insurance cannot verify active coverage
  • Coverage Changes During Treatment: Your insurance coverage may change or terminate while you are undergoing treatment, leaving you uninsured for subsequent visits
  • Retroactive Termination Due to Unpaid Premiums: Insurance companies can retroactively terminate your coverage if you fail to pay the required premiums. This can lead to claims being denied even for services already received.

In all these cases, it is your responsibility as the client to ensure your insurance information is accurate and up-to-date with Rula. Failing to notify us of coverage changes can result in claim denials and you becoming responsible for the full charges.

 

Retro termination

Retro termination denials occur when an insurance company retroactively terminates a patient's coverage, resulting in previously paid claims being denied and reversed.

This can happen if the client failed to pay premiums during the grace period, leading to termination of coverage effective from the last paid date.

In such cases, any claims paid by the insurer during the grace period after the retroactive termination date will be denied and the client will be responsible for those costs.

 

Another scenario for retro termination denials is when the insurer discovers the patient was never eligible for coverage, such as due to providing incorrect information during enrollment.

The coverage is then retroactively canceled from the start date, and any claims paid during the ineligible period are denied and reversed.

To avoid retro termination denials, patients must pay premiums on time and ensure accurate information is provided for enrollment.

 

At Rula, we also take steps like verifying eligibility and benefits before rendering services to reduce the risk of unpaid claims due to retroactive terminations.

 

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