What To Do if Your Health Insurance Claim is Denied

Consumers have options if their health insurance claim is denied. Although a denial can threaten their financial security and ability to access medical care, it is not the end of the story.

Most Americans access health care through health plans. Many companies offer health insurance as part of their benefits packages. Low-income Americans or the self-employed can get insurance through the Affordable Care Act (ACA).

Health insurance companies offer plans on the federal exchange, and consumers can purchase an appropriate plan.

Some providers do not accept any health insurance plans, and this is one scenario where consumers have to submit claims. The consumer has a doctor's visit and pays out of pocket. Then the consumer submits a receipt to the health insurance company for reimbursement.

In other cases, the provider submits a claim to the health insurer after the visit. If the insurer denies the claim, the patient is responsible for the claim amount.

In both scenarios, the insurer can either approve or deny the claim. If they approve the claim, the bill is paid. If not, the consumer can appeal the denial.

Understanding Health Insurance Claims

Whether consumers get health insurance through their employer, the federal government (Medicare and Medicaid), or on a federal exchange, it is crucial to understand their insurers' policies.

After obtaining insurance coverage, consumers will get a copy of the insurance policy. This policy should outline the premiums, if any, and what medical services are covered. Health insurers prefer to cover medical services from health care providers in their network. These providers are under contract with health insurers. They agree to a fixed rate. They are also listed in the insurers' directory.

Providers not in their network are out-of-network providers and can charge their rate for services. An insurer's coverage of out-of-network coverage is outlined in their policy. Prior authorization is one option for out-of-network coverage. The consumer or the provider submits a request to the insurer before the visit for approval.

Another option is for the provider to bill the insurer directly. The bill will include information about the visit. This is the health insurance claim. If the insurer denies the claim, the patient is responsible. If the provider does not take insurance, the patient will pay for the visit and submit a claim afterward.

In each scenario, the health insurer can approve or deny the claim.

Health Insurance Claim Denial Reasons

The first step in determining options after the denial of a claim is to ask why? Why was the consumer's claim denied?

Many insurers send consumers an explanation of benefits (EOB) after their claim is processed. If the insurer denies the claim, the EOB will explain the reason for the denial. Other insurers may issue a denial letter with reasons for the denied claim.

A few common reasons for health insurance claim denials include:

• Services or procedures not covered by the policy

• The procedure is considered experimental, cosmetic, investigational, or not medically necessary

• A referral or pre-authorization was required

• The consumer used an out-of-network provider

• Typographical errors

• Timeliness

• Policy limitations

Consumers can address these reasons through an appeal or by contacting the doctor or hospital to correct the documents submitted.

Health Insurance Claim Denial Appeals

Whatever the health plan's decision, consumers have rights. Consumers have a right to an internal appeal and an external review if necessary. If their state has a consumer assistance program, the program can file an appeal for the consumer. Consumer assistance programs help consumers within their state with any health insurance issues.

Understanding the Claim Denial

The first step is understanding why the insurer denied the claim. The insurer must provide the reason with a timely written explanation of the denial within the following timeframes:

• Within 72 hours, in emergencies

• Within 15 days of prior authorization

• Within 30 days for medical services already received

Consumers can file urgent appeals for a speedy review process if their life is in jeopardy.

Internal Review

If the consumer decides to appeal, they will first review the EOB. The EOB provides information on the internal appeals process. Consumers must include all required documentation with their appeal. This consists of the medical bills and documentation of medical necessity.

External Review

If the insurer denies a consumer's appeal, the consumer has the right to an external review. The steps involved in the external review process depend on where the consumer lives. All external reviews must meet minimum federal standards. In states that meet federal standards, the external appeal moves forward according to state law.

Consumers should contact their state insurance commissioner's office for more information.

If the state laws do not meet these standards, the federal government oversees the entire process through the Department of Health and Human Services (HHS). In those states, insurance companies can follow the HHS process or use an independent review organization.

States not subject to HHS supervision must use an independent third party.

Get Help

If a health insurer denies your insurance claim, you have options. You can ask for more information and appeal the decision. Speak to a local health care attorney today for advice in the appeals process.