Billing issues ALMOST terminate all health insurance for healthcare facility

This was the frantic call we received today in our office from one of our new clients. The executive director and her assistant told us that one of their employees went to the doctor today and they were denied coverage from the insurance carrier.

Our first reaction was...this can’t be true, we know we submitted all of the elections at the end of April. So we called the medical carrier and was told the policies were indeed all canceled on May 8.

What the h*ll is going on!

In November of 2019 our new client was working with another advisor for all of their benefits.

That’s were trouble started and things started falling apart from service levels and communication. So, they were open to a new advisory team to assist them.

It’s kind of like a pressure vessel building pressure along the way but you can’t tell anything is going on from the outside.

In the health insurance industry most carriers do not like partial payments. They like the entire amount paid and then they issued credits later for employees that are no longer on the plan. This is not common knowledge to most people, which is why as advisors it's up to all of us to educate our clients about this.

The immediate pressing need is to figure out why the policies were canceled. We called all of our connections that we could get a hold of at the insurance company without much success at 4:30 PM Eastern time.

After logging into the portal we realized that the bill had not been paid for over three months.

We immediately called the owner and talked about the issue and found out that bills weren’t being paid because they were incorrect. Apparently no one ever told them that insurance companies won’t except partial payments. 

Who is to blame for this. The client? Yes, some blame lies here because it's their job to properly pay the invoices on time. However, it's as much (or more) the Advisor's fault. It's the Advisor's job to educate client about HOW payments must be sent and applied, even if they are incorrect.

This lack of service and communication is a big reason why we are now the advisor for this particular organization. So, what can we learn. A few lessons to be learned by all people related to employee benefit programs;

• Make sure you understand the payment terms from the different insurance companies
• Make sure you know which ones require payment in advance and which ones require payment in arrears
• Realize that most insurance companies don’t like partial payments and that you might need to make the full payment to allow the reconciliation process to work itself through

This was an unfortunate incident that was resolved within about 30 minutes by using the collective teamwork in my office and with our dedicated staff. Having access to all the right people in one location at the same time was essential.

We hope no one goes through these issues in the future but it happens.

John Millen, Managing Partner, [email protected], 804-459-8100