Updated: February 15, 2023
It can be discouraging to get a letter informing you that your medical service or treatment will not be covered. This is especially true when it was something specifically recommended by your healthcare provider. It can seem like the insurance company is rationing your healthcare.
These denials can be for a service or treatment you are requesting (pre-service) or you’ve already received (post-service).
Once your insurer denies your claim, they must explain why and notify you in writing within:
There are many reasons for denials or rejections of your claim but the most common ones involve human error, the terms of your policy, and the nature of your medical care. You may be more likely to expect a denial when you change healthcare insurance policies and their formulary or network does not include your medication or specialist, your treatment was experimental, cosmetic, or investigational, or you and/or your healthcare provider attempt to get an exemption such as for a non-formulary medication, unapproved treatments, or out-of-network provider. In these cases, you may be able to prevent the denial by submitting documentation of medical necessity with the claim.
Typos, incorrect codes/dates, incomplete or missing information, mistaken identity, and other errors that can occur when a claim form is filed or submitting the form after the due date for the filing is often a reason for a rejection.
Rejections do not usually need to be appealed. A phone call to the insurer or submitting a corrected form will often be all that is necessary for simple errors, oversights, like incomplete or missing information, on the claims form, and coding error.
You didn’t follow the rules, such as failure to get a referral, prior authorization, meet deadlines, or other violations of the terms of your policy, you changed healthcare insurance policies and some of your medications and/or consultants are not allowed by your new policy, or you have not met your deductible.
There are equivalent alternatives in the network or formulary you must try first or your care was deemed not medically necessary.
Medical denials happen when the insurance reviewer does not agree with your healthcare provider because your service, test, procedure, or treatment:
Your medical bill was submitted incorrectly. If the rejection was due to an incorrect medical bill, you will be responsible for gathering the information to correct this before re-submitting the claim.
You may have maxed out the coverage limits in your health plan.
When you get a denial, talk to your healthcare provider; there may be medical consequences of having your claim denied.
It can be very expensive when you have to pay the full cost of a denied service.
Having to try alternate treatments or see a different provider can be annoying, but it could compromise your health if they aren’t successful and/or delay effective treatment.
If there are no alternatives, your care will likely be delayed. This could be life-threatening if your condition is serious enough. Examples in which there may be no alternative include:
While it is possible to successfully overturn a denial, it is better to do all you can to avoid one. Like any contract, a health insurance policy is complicated and you may need help interpreting all the details.
The most effective way to prevent denials is to choose an insurance policy that meets your unique situation. You may be able to get a policy that already covers your medications, testing options, and specialists or get one that allows a wider range of medications and referrals, although they are more expensive. You will also need to talk to your healthcare provider before you get or replace a healthcare insurance policy to see how much flexibility your medical care has to use equivalent medications on their formulary and facilities and specialists in their network.
Denials that are based on missed deadlines and violations of the terms of your policy that you don’t know about will usually be unexpected and can be difficult to prevent. While human error is difficult to prevent, knowing about and sticking to the terms of your policy is the best way to prevent unexpected denials. This means:
You should learn the appropriate way to file a medical claims form since it will be you who usually file them when you see an out-of-network provider or have an indemnity plan.
There is information you need before you submit a claim, some of which is specific to each visit. Make sure to provide any additional information from your doctor or healthcare facility that is requested.
When you have the forms and necessary information, fill in every space with required information — even if you are not reminded to. Required information is usually marked with an asterisk (*). Fill in any other information that you think will need to be included to make sure your claim is paid.
Protect yourself by making copies of all forms and additional documents or storing them as files on your computer. This will make it easier to recognize and correct any errors in the claim process. It’s important if you have to re-file your health insurance claim for any reason.
Review your claim to make sure everything is completely accurate and avoid having your health insurance denied for incorrect information. You may want to check with your health insurance company to tell them you are about to send in your health insurance claim form and review the paperwork to make sure there is nothing else you need.
Once you have everything in order, submit the claim form to your insurance company. If you did not file online, the address to send the claim form should be on the claim form itself.
Any time your insurance plan won’t provide or pay for health care services you and your healthcare provider think should be covered you have the right to appeal to your insurance provider and/or an outside agency. This is guaranteed by the Affordable Care Act (ACA). The ACA also mandated a minimal standard that both the internal appeal and the external review processes have to meet. Some states set their own standards that exceed the federal minimal standards.
You could consider appealing if the denial was based on any of these reasons.
The most common way to reverse a denial is to write a letter to the insurance company asking them to reconsider. The letter must be respectful, non-accusatory, and contain enough details to convince the reviewer that they should approve the requested medication and/or service. These details include:
Send copies of the letter to all of the providers involved in your care.
Before you proceed to the next steps you may try speaking to the reviewer’s supervisor or other higher up in the company.
Your care will be covered if the insurance company changes their initial decision. If not, you can move on to a formal appeal.
Each insurance company may have its own process, so you will need to consult your policy or the denial letter for details.
Make note of any deadlines for filing your appeal. You will usually have 30 days to complete your internal appeal if it is for a service you have requested but not yet received and 60 days if your appeal is for a service you’ve already received, but deadlines may differ.
When the appeal involves medical review, it becomes complicated and time-consuming. Examples of situations where medical decisions are made include when a recommended treatment you already had but did not get approved is important enough to be paid for, the treatment that was deemed medically unnecessary after the fact was actually necessary, and/or the denied treatment you are requesting — whether once, multiple times, or chronically — is better for you than the standard treatment.
In preparation for a medical appeal it is important to collect all the necessary information and documentation before you start. This will include:
Filing a formal appeal includes:
Keep a copy of all submissions for your own records.
Ask for assistance from your healthcare provider’s office, insurance representative, human resources department where you work, or outside organizations such as HealthCare.gov, the Patient Advocate Foundation or The Alliance of Claims Assistance Professionals if necessary.
The Level 1 review must be done by reviewers not involved in the initial decision. They will look at all the information, including any additional information provided by you and/or your primary healthcare provider.
The time taken to make the decision may depend on the nature of your medical condition. If your medical situation is urgent, you can request an expedited appeal which requires the insurance company to make a decision within 72 hours. If there is not an urgent need, decisions should be made within four business days.
If the appeal is for treatment you already had, request that your provider not bill you until the issue is resolved. If it is for unapproved treatment you are requesting, make sure you file your appeal soon enough to avoid any complications that may delay treatment further.
Your insurance company can notify you by phone, but must always send you a letter within 48 hours of the decision.
If you and/or your healthcare provider still disagree with a decision or are concerned the internal review was not done in good faith, you have the right to make an appeal through an independent external reviewer. Evidence that the insurance company is trying to deceive you may include:
Once you determine the decision is appropriate for external review (i.e. involves a medical decision), you can start the process. You may ask for help from your insurance company or visit externalappeal.cms.gov.
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External reviewers will usually only review denials that are based on medical considerations; they are not likely to review a denial based on lacking a referral or pre-authorization. An external reviewer may review and make determinations whether or not:
The health insurance company is legally required to accept the external decision if they overturn the internal appeal.
Health insurance is a legal contract and if broken can result in a lawsuit. If the insurance reviewers do not appropriately review your appeal, it is a breach of contract and they should be considered to be acting in bad faith.
In some areas bad faith health insurance claim denials may permit you to make tort claims. Torts, unlike contracts, could result in the award of punitive damages which often exceed the amount of the claim itself.