How To Appeal Health Insurance Claim Denials – Flowchart

The US Department of Labor estimates that about 1 in 7 claims to employer health insurance plans are initially denied. A patient advocate says that she wins 80% of appeals. Yet only 4% of denials are appealed. These stats are taken from the AARP article The Health Claim Game. Are insurance companies relying on the “hassle factor” to help their bottom line? (…reminds me of The Incredibles and Insuricare)

Whether you think so or not, dealing with health insurance claims can be a nightmare. At the end of this article, a handy flowchart is provided which walks you through the “claim game”. Here’s the text:

To Make Insurers Pay

WHEN YOUR CLAIM IS DENIED…

1. Don’t pay the bill.
2. Get a reason for the denial in writing.
3. Review and follow your plan’s rules.

…Make the easy fixes…
• Missing information? Fill it in.
• Coding mistake? Have your doctor fix it.

…And assess other reasons for the denial.
Health care reformers want to end these exceptions, but for now they are hard to overcome:
• Preexisting condition
• Lifetime-benefit cap
• Change of employer, so coverage was delayed

These may be worth challenging:
• No network facility or physician was available
• Drug wasn’t FDA-approved for your illness
• Treatment was deemed unnecessary or unproven

WHEN PREPARING AN APPEAL…

1. Check the back of your denial notice to see how long you have to file—it’s usually 180 days.
2. Gather objective evidence of medical necessity, such as test results and prior failed treatments.
3. Gather journal articles showing the treatment is safe, effective.
4. File the request in writing (certified mail, return receipt).

IF YOU WANT HELP, SEEK OUT…

• A nonprofit patient advocate (your state’s insurance regulator or a disease association can suggest names)
• A lawyer if there’s a large sum of money at stake and you might end up in court.

IF YOUR INSURER STANDS FIRM, YOU CAN SEEK AN INDEPENDENT REVIEW…

If yours is a fully insured plan—that is, the insurer pays the claims. (Though insurers administer all kinds of health plans, roughly half are self-funded, meaning your employer pays the claims.) You have a fully insured policy if you buy insurance on your own.

To appeal a final rejection by a fully insured plan…
Go to your state insurance regulator.

To appeal a final rejection by a self-funded plan…
You will likely need to go to court, though your state insurance regulator can sometimes jawbone on your behalf.

The article also mentions a few potentially helpful groups to ask for further assistance – the Medicare Rights Center, the Patient Advocate Foundation, and Advocacy for Patients with Chronic Illness.

Comments

  1. BigDave says:

    I’ve had to appeal a few claims with United Healthcare. Each time they claimed they made a claims processing mistake and then paid right away. It made me wonder if they were that incompetent, or if they were hoping I wasn’t paying attention to my claims & policy and trying to slip something by. Regardless, it’s good to read your policy and check their work.

  2. As an attorney and someone who successfully appealed a claim denial last year, I really encourage people to obtain their insurer’s applicable policies and really focus on the language in them to support your appeal. Focusing on the unfairness or the difficulty of the situation won’t get you far.

    Aetna and Cigna publish their’s online. I had difficulty obtaining from my insurer, but ultimately they had to explain the basis of their denial including the policy they relied on. Keep pushing.

  3. Aaron Waguespack says:

    I found it is very important to understand your treatments before getting them.

    I was getting a identical treatment which i had a year or 2 earlier.

    Treatment A had the medicine ordered by my doctor and sent to the hospital to be given to me by a nurse.

    Treatment B had the hospital order the medicine and which was given to me by a nurse.

    Treatment A cost me $1,000
    Treatment B cost me $10,000

    Because there was no mistake made (it was the correct medication and correct amount of medicine) I was told i could not appeal by both the hospital and my insurance company. I was told by both i should have noticed the difference before receiving the treatment, and since i already received the treatment it was to late in this case.

    I was also told that a doctor can not recode a treatment after you receive it unless you recieved the wrong medicine or amount of medicine.

    This completely opened my eyes.

  4. Hospitals are increasingly disguising themselves as doctor’s offices, a trap my wife and I fell for last year.

    We were very well aware of our medical insurance benefits: 100% coverage at a doctor’s office, 80% at a hospital. My wife’s OBGYN referred us to a doctor at Atlanta Perinatal Consultants for an amniocentesis. We checked out the website and from the looks of it, this was just another doctor’s office. Well it turned out it wasn’t. It is an outpatient facility of Northside Hospital. Note that the Atlanta Perinatal website never mentions the place being an outpatient facility or being affiliated with any hospital.

    Many hospitals around the country are now using this marketing strategy to lure in the unsuspecting customer. They realize that many companies have decreased medical coverage of costly hospital use in favor of affordable urgent care facilities.

    We received bills from both Atlanta Perinatal (for the doctor’s fee) and Northside Hospital (a facility fee). Total out-of-pocket cost of $800 instead of the $40 copay. The hospital wouldn’t budge, stating that my wife signed a piece of paper that informed her of the place being an outpatient facility the day she went in for her amnio. The insurer said they paid their share of the claim as per the contract which they did.

    Bottom line is understanding your benefits is not enough, you should also understand what type of place you are going to. Just because it looks like a doctor’s office does not mean it isn’t a hospital.

  5. wow, stories like this make me almost glad to be uninsured (I just go to charity clinics, no problem with billing there). I’m poor though, so this won’t be an option for many of you.

    What’s interesting is the type of doctor that works at a charity is not interested in gouging patients with unnecessary treatments, so they tend to get right to the problem at hand. I can see this in effect with dentists, too; when I go to a dentist with dental insurance they always come up with a bunch of treatments I “need”.

  6. All insurance companies make their profits by maximizing the difference between premiums collected and claims paid out. Any strategy that contributes to this end is fair game as long as they can get away with it. Considering all the horror stories you hear about Social Security disability claims being denied, you wonder if public, single-payer insurance would work any better. Do other countries handle this any better?

  7. Donald,

    I used to live in the UK where they have socialized single-payer healthcare. There are no billing or claims issues because all you do is show the hospital or GP your NHS card and everything is taken care of without payment or claims. Dental care & prescriptions are the only thing you pay for, and those are charged a flat-rate fee no matter what service/Rx or doctor you go to so there’s no room for haggling or price issues.

    The government gets the money for all this from the high taxation in the UK.

    There is a private health insurance option but maybe 2% of the population goes for it. It’s usually seniors and rich people who don’t want to be in a crumby government hospital.

    I personally was very impressed with their public program. As a foreigner, it was very strange they even allowed me on the program, but I got the full deal like a citizen would. I don’t think it would work in America though, people here are too individualist.

  8. wow, there are so many lessons to learn here. Thank you!

  9. One thing I have noticed lately is the need to see if the denial was because the in-network provider sent it to the wrong address. Two recent ways I’ve seen this happen was [1] when a health professional sent the claim to the insurance carrier, not the network and [2] where another health professional sent it to the same said carrier, but claims of this type were also supposed to be sent to their vision’s discount network.

    Such denials are usually easily objected to, it would appear for me. In the first case, the carrier forwarded it to me with courtesy letters to me and the health professional explaining the delay and requesting claims to be sent to a different address next time. In the case of the second one, however, they only told me when I called, asking what ‘my mistake was, so I can learn for next time’. The EOB for that only said that routine examinations of that health professional weren’t covered, and it took me quoting a specific page number from their policy document before I heard some rustling of paper (presumbly them reading the policy document) and that they finally knew what in the world I was talking about.

    It seems to always pay to call the 800 number to check.

    I miss the public healthcare system in my country of birth, but I for some reason had supplemental/secondary coverage through private insurance of varying levels at different periods of time, and dealing with those was sometimes enough work that it wasn’t worth bothering to claim (it was particularly hell dealing with, at one point, two private secondary carriers — no coordination of benefits either between themselves or the public system) sometimes, imho.

  10. health insurance axis says:

    Good tips on what to do if your claim is denied. The best thing is to make sure you get a good insurance company in the first place.

    WHEN YOUR CLAIM IS DENIED…

    1. Don’t pay the bill.
    2. Get a reason for the denial in writing.
    3. Review and follow your plan’s rules.

  11. “mrt Says:

    June 2nd, 2010 at 7:05 pm
    Hospitals are increasingly disguising themselves as doctor’s offices, a trap my wife and I fell for last year.

    We were very well aware of our medical insurance benefits: 100% coverage at a doctor’s office, 80% at a hospital. My wife’s OBGYN referred us to a doctor at Atlanta Perinatal Consultants for an amniocentesis. We checked out the website and from the looks of it, this was just another doctor’s office. Well it turned out it wasn’t. It is an outpatient facility of Northside Hospital. Note that the Atlanta Perinatal website never mentions the place being an outpatient facility or being affiliated with any hospital.

    Many hospitals around the country are now using this marketing strategy to lure in the unsuspecting customer. They realize that many companies have decreased medical coverage of costly hospital use in favor of affordable urgent care facilities.

    We received bills from both Atlanta Perinatal (for the doctor’s fee) and Northside Hospital (a facility fee). Total out-of-pocket cost of $800 instead of the $40 copay. The hospital wouldn’t budge, stating that my wife signed a piece of paper that informed her of the place being an outpatient facility the day she went in for her amnio. The insurer said they paid their share of the claim as per the contract which they did.

    Bottom line is understanding your benefits is not enough, you should also understand what type of place you are going to. Just because it looks like a doctor’s office does not mean it isn’t a hospital.”

    Even I fell in the same trap, I am already going through a financial crisis. I really don’t know what to do. @ MRT Did you take any steps to get out of this. I recieved a bill of $145 from “Atlanta Perinata”l, $837 from North Side Hospital and around $40 for other lab tests.
    Even I thought Atlanta Perinatal Consultants is just another doctor’s office and not a hospital facility. Now, I am being told that I will have to bear the responsibility of paying all the bills I received as my insurance provider denied to cover it.
    I would appreciate any help/ suggestions on it

  12. @Shils We contacted both Atlanta Perinatal and Northside Hospital to argue our case. Atlanta Perinatal ended up writing off about $70. At Northside Hospital we went up the chain of command as far as we could. But they wouldn’t budge. They seem to know the drill, their standard answer being “your wife signed a document the day she came for her procedure stating that she would receive a bill from Northside Hospital”. We ended up paying the full amount for the bills from Northside Hospital.

    Here are the other things we did:
    -instead of having our child born at Northside Hospital, we went to Emory University Hospital Midtown and have been very pleased with the experience. They seem to be a lot more ethical about their billing practices. And they don’t try to hide their general practice as an independent practice. Their “doctor’s office” is called The Emory Clinic, so just from the name you know it belongs to Emory Hospital.
    -we also switched OBGYN to one who would deliver at Emory Hospital. We did not have a problem with that as it was the OBGYN office who referred us to Atlanta Perinatal and they could have easily warn us about the place being an outpatient facility.
    -we wrote a formal complain with Georgia’s Office of Consumers Affairs and the FTC Bureau of Consumer Protection. Nothing came out of it, but maybe if enough people complain, something will be done to protect the consumer.
    -we told all our friends and acquaintances about our experience, especially those who were getting ready to have a baby, and warn them about the dishonest marketing and billing practices of Atlanta Perinatal and Northside Hospital

    In the end we believe that this costly experience made us better consumer. From now on we won’t just be checking doctor’s offices we are being referred to, we will be double-checking them. We now know what questions to ask before making an appointment, like are you a real doctor’s office or just a front window for a hospital?

    If it is any comfort, know that this is now a common trick across America as related in this Wall Street Journal article. Hospitals are taking advantage of the lack of regulations. Only if enough people complain will eventually something be done about it. Please let us know if you are able to find a resolution.

Trackbacks

  1. [...] How To Appeal Health Insurance Claim Denials @ My Money Blog [...]

Speak Your Mind

*