Health Insurance 101: What Is a Claim?

Here’s how your insurance company knows you’ve received medical care.

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In the digital age, the health insurance process can sometimes seem like a mystery. How does your insurer know when you’ve received medical care? In most cases, you probably didn’t pass on that information yourself, yet a couple weeks after your last doctor appointment, you receive a letter or email that the health insurance company has “processed” your claim. What does this mean?

What Is a Health Insurance Claim?

A claim is a request for payment from your health insurance company. It’s usually submitted by the provider (the facility, doctor, or supplier who gave the service). It’s almost like an invoice from the doctor to the insurance company. It says what service you received and the requested payment.

For example, let’s say you have surgery to remove your wisdom teeth. The dental office will submit a claim for payment directly to your insurance. If your insurance company approves it, they’ll let you know what you owe (if anything). You may have to pay a small percentage (a coinsurance) of the total bill, for instance.

What Happens If the Insurer Doesn’t Approve a Claim?

Your insurance company could deny the claim in some cases. For example, they may reject the claim if they believe the surgery wasn’t medically necessary, or if your type of plan doesn't cover the surgery. If your insurer rejects the claim, you would possibly need to pay for the service yourself.

It’s important to know that insurers make mistakes, and you can appeal claim denials. This usually involves providing “evidence” (such as a letter from your doctor) to defend the claim. The insurer may or may not change their position based on your appeal.

Avoiding Claim Denials

Your best bet is to contact your health insurance before receiving services. This process is known as preauthorization or prior approval. That way, you can be more confident that your insurer will cover the service or procedure. Plus, it can reduce your risk of getting stuck with denied claims or surprise bills.