Like any insurance, the international private medical industry uses very specific terms to refer to particular aspects of cover or, as in this case, procedures that are relevant to a policy.
For brokers and IFAs that do not delve into this market on a daily basis, this can be a little confusing – especially because the international market can be different from their domestic counterparts.
There are two particular terms that advisers and their customers should get to know: pre-authorisation and direct settlement. I’ll explore these a little further in this piece.
Expatriates who claim on their International Private Medical Insurance will almost certainly have to deal with ‘pre-authorisation’. It’s a term that insurers like to get across to their members as clearly as possible and will usually add it to policy documents, membership cards and within their website pages.
Why is pre-authorisation important?
Insurers are keen to ensure their members contact them before any treatment is received. This allows the insurer to discuss the condition and confirm to the member that their treatment will be covered and that associated medical bills will be paid.
There are, however, a variety of less obvious reasons why pre-authorisation is important.
The pre-authorisation requirement also provides the insurer with a useful opportunity to guide the member looking for treatment, something that can be particularly useful when it comes to international private medical insurance.
Where financial limits might be an issue, it’s important that the member is clear on how far their cover will stretch. Equally if only a certain number of visits for a particular condition are allowed, clarifying this upfront will help to avoid difficult conversations down the line. Moreover, any co-insurance and deductibles on the policy can be highlighted, so the member fully understands his or her financial obligations.
Guiding members into Medical Networks
A call to discuss pre-authorisation can also be an opportunity for the insurer to direct the member to a specific medical provider – perhaps because of the facility’s location, specialism or the fact that it is in the insurer’s network. This particular guidance can be critical where a condition is out of the ordinary.
Where the insurer has a record of the facility that is treating their member, they are more easily able to make early contact to look after administrative details and keep track of treatment plans. Again for more complex cases, the ability for the insurer to monitor treatment can be critical, especially given the global nature of international health insurance and the variety of treatment standards that can be experienced.
Direct Settlement removes cost burden for members
As well as receiving guidance and other support, members will also be able to understand whether their treatment will be directly settled by the insurer with the medical provider.
Direct Settlement removes headache of having to pay bills and then claim back – hassle that members can do without when they are trying to recover from treatment. This is especially the case when the treatment provided is expensive.
Insurers will usually only offer this facility when a hospital or clinic within their provider network is used. Where this isn’t the case the insurer may still agree to settle bills directly, as long as the treatment has been pre-authorised and they have had an opportunity to discuss the treatment plan and fee structure with the facility. This fact further emphasises the importance of the pre-authorisation step for those covered by international health insurance.
Insurers understand that there is a benefit to their members when the hassle of having to settle claims directly is removed and they try to pay fees directly wherever possible. This route also avoids the potential for difficult conversations with the member down the line who may not have realised that his or her policy did not stretch to the fees being charged by their provider of choice.
Summary
Pre-authorisation and direct settlement often go hand in hand and are two important aspects of International Private Medical Insurance that those looking for cover, and their advisers, need to understand. Failure to take the appropriate steps can leave a hefty and unexpected bill that will need to be paid and claimed back or, worse still, may be disputed by the insurer.