Treatment Insurance: Denied Coverage?

Being denied insurance coverage for medical treatment can be a frustrating and even life-threatening experience. There are various reasons why insurance companies may deny a claim, including lack of medical necessity, the treatment being deemed experimental or investigational, or errors in the claim filing process. This can result in patients being forced to accept less effective treatments with severe side effects or, in some tragic cases, losing their lives due to lack of access to necessary care. Fortunately, individuals have the right to appeal insurance denials and seek external reviews if internal appeals are unsuccessful. Understanding insurance terms and knowing how to navigate the appeals process can help individuals effectively fight for the treatment they need.

Lack of medical necessity

Each health insurance policy contains its own specific definition of medical necessity. Generally, many health policies state that treatments are medically necessary if they are safe and effective in treating a particular condition. However, insurers may have different criteria for determining if a treatment meets this definition. For example, they may require that there are no less expensive or equally effective alternative treatments available. This can result in patients being denied access to treatments with a better prognosis or fewer side effects simply because a cheaper option exists.

In some cases, insurers may rely on out-of-date articles, published literature, or the opinions of unqualified reviewers who do not have expertise in the relevant area of medicine. They may also have financial incentives to deny care, such as bonus systems tied to corporate profits.

When treatments are denied due to lack of medical necessity, the insurer often ignores or gives little weight to the opinion of the treating physician, instead relying on guidelines implemented by non-physicians. This can result in patients being denied treatments that are essential to their health, well-being, and survival, causing substantial risk of permanent harm or death.

If you receive a denial due to lack of medical necessity, you have several options to fight back. You can file an internal appeal with the insurer, providing as much detail and evidence as possible to support your claim. You may also be able to seek an independent medical review (IMR) from a state regulatory body, which will assess whether the insurance company's decision was justified and reasonable. Additionally, you may consider filing a legal action in a court of law or seeking a restraining order or injunction to get fast approval for critical or life-saving treatment.

Services deemed experimental

Health insurance providers often deny claims for healthcare benefits on the grounds that the treatment is "experimental". This is a common strategy for insurance companies to save money and limit payouts, as they can argue that they are not subsidising medical research and paying for unproven treatments.

In the context of insurance, "experimental" or "investigational" refers to any treatment, therapy, drug, or procedure that has not been approved by the FDA and is not recognised by generally accepted medical standards. It also includes treatments deemed unsafe or ineffective for certain conditions.

However, insurance companies may wrongfully categorise a standard procedure as experimental. For example, Artificial Disc Replacement surgery has had FDA approval for over 15 years, yet insurers still deny it as experimental.

If a procedure is approved by the FDA, an insurance company should not deny it as experimental. This would be strong grounds for an appeal. Additionally, lack of FDA approval might not be a definitive cause for denial if the medical community has agreed on certain treatments for specific ailments.

If a treatment is deemed experimental, patients can challenge the denial by:

• Checking if the denial was accidental due to errors in billing codes or other administrative errors.
• Getting the doctor's support and documentation explaining that the treatment is regarded as safe and accepted for patients with their condition.
• Researching if the procedure has received approval from physicians and government agencies. If it has received widespread support from the medical community, FDA approval, or Medicare approval, then the insurer may be compelled to approve it.

If a person has been wrongfully denied coverage for a treatment they need, they can seek legal help to carefully examine the reasons for the claim denial, analyse the insurer's policy statement, and help file an appeal with relevant case law support.

Errors in the claim filing process

Not Documenting Properly

The lack of proper documentation can jeopardize the success of your claim and your credibility with the insurance company. It's important to provide comprehensive documentation, including photos, bills, invoices, police reports, witness statements, and medical reports if applicable.

Delaying the Claim Process

Delays in filing a claim can lead to complications such as missing crucial evidence and issues with meeting insurance company time limitations. It's important to act promptly and not miss any deadlines to improve the chances of a successful claim.

Incorrect Information

Providing incorrect information, such as patient, provider, or insurance details, can result in a rejected claim. It's crucial to double-check all information and ensure accuracy to avoid delays and additional issues.

Incomplete or Confusing Codes

Entering confusing or incorrect medical codes, such as ICD, CPT, or HPCS codes, can lead to a rejected claim. It's important for medical billers to be up-to-date with the latest coding protocols and double-check their work to ensure accuracy.

Poor Communication with Insurer

Effective communication with your insurance company is essential. It is recommended to get the email address of the person you're speaking to and follow up with an email confirming the conversation. This provides a written record that can be useful if there are any issues or disputes later on.

Not Understanding the Policy

Not fully understanding your insurance policy can lead to mistakes in the claim filing process. It's important to know what your policy covers, any exclusions, and your rights and responsibilities when filing a claim.

Services no longer appropriate

Services may no longer be appropriate in a specific healthcare setting or level of care. This could be due to a change in the patient's health status, the availability of alternative treatments, or a change in the standard of care.

For example, a patient may have initially been prescribed a particular treatment that was appropriate for their condition. However, over time, their health status may have improved or deteriorated, rendering the original treatment no longer appropriate. In such cases, the insurance company may deny coverage for the original treatment and recommend alternative treatments that are more suitable for the patient's current health status.

Additionally, new and alternative treatments are constantly being developed and introduced. As a result, the standard of care for a particular condition may change, and treatments that were once considered appropriate may no longer be recommended. In such cases, insurance companies may deny coverage for outdated treatments and instead cover the newer, more effective treatments.

Furthermore, the availability of certain treatments may impact their appropriateness. For instance, if a patient requires a specialized treatment that is only available at a limited number of facilities, the insurance company may deny coverage if the patient is unable to access those facilities due to geographical or financial constraints. In this case, the insurance company may offer alternative treatments that are more accessible to the patient.

It is important to note that patients have the right to appeal insurance denials. If a patient believes that a denied treatment is still appropriate for their specific circumstances, they can follow the appeal process outlined by their insurance company. This process may involve providing additional medical documentation, seeking support from their healthcare provider, or escalating the matter to external review organizations.

By regularly reviewing and updating their coverage policies, insurance companies aim to ensure that they are providing access to the most effective and appropriate treatments for their policyholders. While this may result in certain services no longer being deemed appropriate, it ultimately helps to ensure that patients receive the highest standard of care.

Unfair/bad faith claim denial

Bad faith insurance refers to an insurer's attempt to renege on its obligations to its clients. This can manifest in a few ways:

• Refusal to pay a policyholder's legitimate claim
• Failure to investigate and process a policyholder's claim within a reasonable period
• Misrepresenting an insurance contract's language to the policyholder to avoid paying a claim
• Failing to disclose policy limitations and exclusions to policyholders before they purchase a policy
• Making unreasonable demands on the policyholder to prove a covered loss

Bad faith insurance can apply to any type of insurance policy, including health insurance, auto insurance, and life insurance. It's important to note that simple mistakes do not constitute bad faith.

If a policyholder suspects bad faith, they should confront their insurance company or consult a lawyer. State laws, known as unfair claims practices acts, are in place to protect consumers from insurance companies' bad faith actions. These laws may require insurance companies acting in bad faith to pay damages beyond the amount owed under the claim, including compensation for out-of-pocket expenses, missed work, and attorney's fees.

• Claiming Non-Coverage: The insurance company states that the policyholder is not covered for their submitted damages when they actually are.
• Making Offers Below a Claim's Worth: The insurance company provides a low settlement offer, significantly below what the policyholder is entitled to.
• Refusal to Provide Reasons for Denial: The insurance company fails to share the reasons why a claim was denied.
• Using Biased Experts: The insurance company brings in experts who are paid by them, leading to unfair settlements or denied claims.
• Threatening Legal Action: The insurance company representative makes threatening statements regarding legal action against the policyholder for submitting a claim.
• Delaying the Process: The insurance company slows down the claims process, knowing that some individuals will walk away or accept less than they deserve.

If you believe your insurance company is acting in bad faith, it's important to seek legal advice and understand your rights to request documentation from your insurer.

Frequently asked questions