Will Insurance Claims Be Closed When There Is an Insurance Provider Change?

When you or your company makes a change from one health insurance provider to another, claims still need processing. The insurance company does not close the claim, until it is processed. If there is no lapse in coverage, several factors determine who is responsible for the claim payment and closure. Depending on the nature of the care and when it is received, generally, the insurer in place on the date of the claims' service will be responsible for payment. This may vary based on employer funding arrangement for insurance costs.

Transition of Care

• When a patient moves from one insurance company to another, often, both insurers work together to transition care if the patient is in the middle of treatment. Sometimes, the insurer at the time care began pays for any work in progress or inpatient treatment started before the change of insurers. For example, if a patient is admitted to the hospital on December 30 and is discharged on January 2, and he switched health insurers on January 1, the insurer in place on December 30 would cover the entire claim and close it out. Other times, the new insurer will take over the claims payment beginning on the new plan's effective date.

Run Out Claims

• When companies offer a fully insured group health plan, they pay one policy premium that covers administrative and claims services. If this company switches from one insurer to another, the previous insurer pays for all claims with dates of services before the new insurer's plan is effective. Insurance plans and state regulation allow claims to be submitted for a defined period, called the run out period, after the dates of service. This varies between insurers and group plans but can be anywhere from three months to one year after the date of service or insurance plan terminates.

Payment Responsibility

• Despite your company making an insurance provider change, ultimately claims submission is the responsibility of the patient. If you do not know who should pay a claim when there is an insurance change, call the customer service number on the back of your insurance ID card to inquire. Companies that offer self-insured group health plans, in which the employer pays for the claims, not the insurer, may not follow the standard of the previous insurer handling claims if the claims' dates of service is prior to the new coverage taking effect.

Bottom Line

• In any case, either the previous insurance provider or the new insurance provider will process your claim. It will not immediately close because of the change. Someone will be responsible for the claims' payment. In order to ensure claims are processed, contact each insurer to inquire who should pay and confirm this with your company's internal benefits or human resources manager. Always notify your doctors of a change in your insurance before receiving care.