Hospitals survive because many can go to their constituency in fund raising charity drives. But the provider as well as the patient is hurt, and hurt badly. But the most difficult part of this situation is that providers tend to give great credibility to an insurance company or a Medicare denial. Thus, if an insurance company denies a claim, as not being covered by the policy, then the provider takes the insurance company's word as gospel, and simply tries to collect from the patient. That is not fair to the patient, and is also not fair to the health care provider.
Hospitals especially fail to challenge the insurance company's decision.
Very frequently, the decision by an insurance company to deny a claim is incorrect. Since all Medicare claims are administered by insurance companies under contract with Medicare, it is easy to assume that where an insurer administers its own claims a substantial number of claims would be reversed, either on appeal or in a lawsuit. The writers have found that situation to be true. We have found that many insurance claims are either reversed prior to litigation, or resolved during litigation. That is because the claims people or the data entry people may not have the command of the terms of the insurance policy as the insurers would like.