Why Some Insurance Claims Are Denied

Alma supports your provider’s practice by offering regular estimates of client insurance eligibility and payment responsibility. Alma works hard to review the most up-to-date information available from client health plans in making these estimates, but they are still subject to change. 

In some cases, after reviewing and processing a claim, a health plan may either require a payment adjustment for a session or deny the claim outright. A claim denial means that a health plan has reviewed an insurance claim and determined that they will not cover any cost for the dates or services received by the client.

Why do claims deny? 

Here are a few common reasons why a health plan may deny an insurance claim: 

  • Lapse of coverage: A lapse of coverage may happen if a client falls behind in paying their insurance premiums. Typically, health plans offer a grace period to the client to bring their account up to date. However, if the client is unable to pay their premiums within that grace period, the health plan will retroactively terminate coverage.

    Retroactive termination means that the health plan will set a new end date for the client’s plan, generally dated back to the last premium the health plan received. The health plan will then deny all claims for dates of service after that last premium was processed.

  • Coordination of benefits: In cases where a client has two or more health plans, coordination of benefits is the process insurance companies use to determine which is the primary plan — the plan responsible for covering the client’s claims first.
    After reviewing claims, a client’s health plan may determine that it is the secondary — not the primary — plan and deny services. You can find out more about this type of denial here: Coordination of Benefits.

  • Inactive policy: Health plan benefits have a set start and end date, generally covering one year. Any sessions that take place before or after these benefit dates will be denied. However, these dates can change if the client has a qualifying life event, including:
    • Turning 26 (meaning they can no longer use a parent’s health plan)
    • Change or loss of employment
    • Change in marital status
    • Relocation 
    • A new child

If you are experiencing any of these life changes, please share any possible insurance updates with your provider.

How does Alma support with denied claims?

Alma’s goal is always to partner with you and your provider in clarifying and resolving insurance issues as they arise. 

  • When Alma receives a notification from your health plan that a claim has been denied, we will reach out to both you and your provider to let you know why.
  • If your health plan denies the claim due to an inactive policy, coordination of benefits error, or retroactive termination, we will work with you to identify if you have another active insurance policy that you can use instead
    • While we work with you and your provider, we will update your insurance status to "ineligible" so that you do not continue to receive new insurance invoices as we resolve the issue.
    • If we can resolve the issue, we will reprocess the claims with your updated health plan and update your insurance status back to “eligible”.
    • You and your provider can discuss an appropriate out-of-pocket rate to cover sessions while we are looking into the denied claims.
  • Ultimately, if we confirm that you do not have another active insurance policy to cover the dates of service in question for the denied claims, you and your provider will need to agree on an out-of-pocket rate to continue care.

What can you do to avoid denied claims?

  • Check in periodically on the terms and details of your insurance.
    Policies may end or reset at any time of year, but the most common periods for routine insurance updates are July and December. Policies can also change due to qualifying life events such as marriage or divorce, job changes, or relocation.

    By making sure that you understand the terms of your benefits and sharing that information with your Alma provider, you can ensure that your insurance information in the Alma portal is accurate and up to date.

  • Confirm your primary health plan, and share those insurance details with your provider. 
    To avoid any coordination of benefits issues, if you have multiple insurance plans, we recommend that you verify directly with your insurance which plan is the primary plan. You can call the number on the back of your insurance cards to confirm this information.

    Once you have verified which plan is primary, you can share those insurance details with your provider to generate an eligibility check.

    Please note: Currently, Alma can only process primary insurance. We will not be able to process secondary insurance, even if we are otherwise in-network with that plan.

If you do receive notification of a claims denial from our team, remember that you do not have to go through this process alone. Alma’s team is here to work with you and your provider  on next steps to address the outstanding issue. Let us know if you have any questions at support@helloalma.com

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