A pre-determination letter is a letter or form sent from a medical provider, such as a doctor or surgeon, to a patient's health insurance carrier to determine if the planned services will be covered under the patient's healthcare plan. It is sent before the services are performed. This helps prevent any surprises for the patient in terms of services not covered, which he would be responsible for paying for. A pre-determination letter is a helpful planning tool since it can lead to further discussion between the patient and the doctor regarding alternative choices that are more likely to be covered by the carrier.
The pre-determination letter outlines the services the provider plans to perform. This might also include the materials and medicines needed to perform the service, such as anesthesia. By relaying the various steps of the process of the procedure, the health insurance carrier can best determine what aspects it will cover, which could be all of them, some of them or none of them.
The reasoning behind the medical service is also an important part of the pre-determination letter. This aspect of the letter lets the insurance carrier know why the service is being performed. This allows the carrier to determine if it is medically necessary. If the service is deemed to be not medically necessary, the carrier could refuse coverage. A diagnosis, for example, could be included in the pre-determination letter.
A pre-determination letter is used to determine the level of coverage the member, or the patient, will receive if the service is performed. The insurance carrier might opt to cover the service, portions of it, or none of it. This information is useful to the patient because he can then talk to his provider about alternatives, or budget for expenses not covered.
Ultimately, the cost to the patient will be the most important information gleaned from the pre-determination letter. The letter helps prepare the patient for what she can expect financially, whether it's as a copay, deductible expense or out-of-pocket payment for services not covered. The result of the pre-determination letter will let the patient know what to expect and plan her budget accordingly.
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