How to Appeal a Health Insurance Claim Denial – Forbes Advisor

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A health care provider usually files a claim with your health insurance company after you receive treatment, services, drugs, or medical supplies. The insurance company reviews the claim and decides whether your health plan covers the service and how much the provider should be reimbursed. This decision affects how much you pay.

A health insurance company may deny a claim or pay much less than you expected. But there is a health insurance claims appeals process if you believe your health plan should pay for this care.

What is a health insurance claim?

A health insurance claim is a payment request submitted by you or your health care provider to your health insurance company after you receive services, treatment, drugs, or medical supplies that you believe are covered by your insurance plan. An accepted claim covers the bill in whole or in part and reimburses the provider or patient for those costs.

Your insurer may deny the claim and refuse to pay or reimburse you for the services or treatment. The Kaiser Family Foundation estimates that 18% of in-network health insurance claims were denied by Affordable Care Act marketplace health insurance companies in 2020.

Why would a health insurance claim be denied?

A health insurance company can deny a claim for many reasons, including:

  • The treatment or service is not considered medically necessary or appropriate.
  • The plan does not cover the treatment, service, drugs or goods.
  • The health care provider is not in your plan’s network.
  • Your insurer requires prior authorization or a referral from your primary care physician.
  • The treatment is considered investigational or experimental.
  • Your cover has expired or you are no longer registered with the insurer.
  • A documentation or data entry error prevented the claim from being processed correctly.
  • The claim was not filed on time.

Rejected Claims vs. Rejected Claims

A “rejected” claim is actually different from a “rejected” claim. Here’s the difference:

  • A denied benefit is one that the insurer has determined is not payable. These claims may be non-payable due to vital errors or breach of the provider’s contract.
  • A rejected claim has one or more errors found before the claim is processed, often due to missing or incomplete information on the claim form.

Patients or providers are typically notified of a denied claim through a mailed or emailed explanation of benefits or electronic transfer advice. Insurers will usually explain why they have denied a claim when they send the denied claim back to the submitting party. Most denied claims can be appealed.

Denied claims must be corrected and resubmitted by you or your healthcare provider. If ultimately denied, denied claims can most likely be appealed.

What is an expedited appeal?

You can ask for an expedited appeal if you think waiting for a decision on your claim could put your health at risk, such as if you urgently need medication or are currently in hospital.

An expedited appeal is allowed if the time frame for the standard appeal process would significantly endanger your life or your ability to regain maximum functionality. In this case, you can submit an internal appeal and a request for external review at the same time.

To request an expedited appeal, explain on your appeal form that you need a faster appeal and state the health reasons in your appeal letter.

Expedited appeal decisions are usually given quickly based on the urgency of the patient’s medical condition. In most cases, this decision is made within three calendar days of the initial date of receipt of the complaint.

Two ways to appeal a health insurance claim denial

There are two ways to appeal the denial of a health insurance claim: internal review and external review.

Internal review

An internal review appeal, also called a “grievance procedure,” is a request that your insurer review and reconsider its decision to deny coverage to your claim. You have the right to file an internal complaint. In doing so, you are asking your insurer to conduct a fair and complete review of their decision.

External review

If your insurer continues to deny coverage for a disputed claim, you have the right to appeal to an external review. An independent third party does this. It’s called “external” because your insurer will no longer have the final decision on whether or not to pay a claim.

Steps involved in appealing a denial of a health insurance claim

Step 1: Find out why the claim was rejected

If you have received notice from your insurer that your claim has been denied, read the correspondence carefully, including any explanation of benefits provided.

Your insurer is required by law to notify you in writing and explain why your claim was denied within 15 days if you are seeking prior authorization for treatment, within 30 days for medical services already received, or within 72 hours for questions , related to urgent care.

If the explanation is not satisfactory or unclear, try contacting your insurer and find out more. Carefully document every communication with your insurance.

Step 2: Ask your doctor for help

Contact your doctor’s office and ask why they think your insurer denied your claim. It could simply be a problem because the provider’s office entered the wrong payment code.

Ask them to confirm that the treatment or service provided was medically necessary and that the appropriate medical code was submitted to the insurer. Document everything you learn.

Gather documentation from your provider, including health records, dates, a copy of the claim form they submitted, and possibly a new letter from your doctor requesting that the claim be accepted based on their assessment of the situation.

Step 3: Learn how and when to appeal

Review your health insurance policy, which should outline the steps required to file an appeal, the deadlines for filing an appeal, and how and where to file the appeal. Call or email your insurer if you are missing these documents.

Step 4: Write and submit an internal appeal letter

Draft a letter of appeal with all relevant facts, details and justification necessary to defend your claim. Be as factual, brief and respectful as possible. Do not be threatening, hostile or abusive in your words or tone.

The National Association of Insurance Commissioners offers a sample internal appeal letter.

Step 5: Check back with your health insurance company

Review your policy regarding how long you can expect to wait before your insurer reviews and issues a decision on your claim. After this time has passed, or if you are in doubt, contact your insurance company to check the status of your appeal.

Step 6: File a complaint for external review, if necessary

If your internal review appeal was denied and your claim remains disapproved, consider filing an external review appeal. This must be filed within four months of the date you received a final decision or notice from your insurer that your claim was denied.

Ask your insurer how to formally submit an external review.

Step 7: Contact your country

If you have exhausted the appeal process with your insurer, contact your state’s insurance department, attorney general’s office, or consumer affairs office. States can help you with an outside review of the claim denial.

How long can you appeal a claim denial?

You have a maximum of six months (180 days) to file an internal appeal after learning that a claim has been denied.

If you submit a written request for an external review, it must be done within four months of the date you received notice or a final decision from your insurer that your claim was denied.

How long does it take for a health insurance company to make a decision on a denied claim?

Although the timeline may vary depending on the laws of your state, after filing a complaint you should expect to receive a response or appeal decision within:

  • 30 days if your internal appeal is for a service you have not yet received
  • 60 days, if you are an internal appeal, is for service you have already received
  • 45 days for standard external reviews
  • 72 hours for expedited external reviews
  • 7 calendar days for requested experimental or investigational treatments or services

What is the Law of No Surprises?

Congress passed the No Surprises Act, which went into effect in January 2022.

The legislation was intended to reduce surprise medical bills for group health insurance and individual health insurance plans. The No Surprises Act prohibits:

  • Surprise bills for emergency services from an out-of-network provider or facility without prior authorization
  • Out-of-network cost sharing, including copayments and coinsurance, for emergency services and some non-emergency services
  • Out-of-network accounts and balance accounts for additional care, including anesthesiology, from out-of-network providers who work at an in-network facility

The legislation means you won’t be liable for these types of common charges that lead to surprise medical bills. You still have to pay the usual in-network costs, but the health care provider and health insurance company must negotiate payment for applicable surprise medical bill charges. They may have to go through an independent dispute resolution process if they can’t reach an agreement, but you as a member will not be affected.

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