Orlando Harmon
Health insurance companies will often deny coverage for medical treatment on the basis of 'medical necessity'. This means that the insurer has deemed the treatment unnecessary, unsafe, or inefficient. Insurers may also deny coverage if the treatment is too costly, or if the patient has missed appointments or is inconsistent with their at-home treatment. If you have had a claim denied, you can request an explanation for the denial and then file an appeal with the insurer. You may also seek an independent review, or IMR, where an independent medical professional assesses whether the insurer's decision was justified. If all else fails, you can take legal action and file a lawsuit against the insurer.
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What You'll Learn
Appealing a denial
If your health insurance claim has been denied, you have the right to appeal the company's decision and have it reviewed by a third party. This can be done through an internal appeal, or by taking your appeal to an independent third party for an external review.
Internal Appeal
The first step is to understand why your claim was denied. Review the denial letter from your insurance plan, which should include detailed information about the denied claim, how long you have to appeal, and how to start the appeal process. You can then call your insurance provider to ask for more details about the denial and review your appeal options. Each insurance company has a specific appeals process, so make sure you follow their steps carefully and submit any required forms and paperwork within the given timeframe. You may ask your insurance company to conduct a full and fair review of its decision. If the case is urgent, they must speed up this process.
External Review
If your internal appeal is rejected, you can submit your case for an external review by an independent third party. This means that the insurance company no longer has the final say over whether to pay a claim. You can find more information about your external review options in your Explanation of Benefits (EOB), along with contact details for the external reviewer.
Independent Medical Review (IMR)
You can seek an IMR if your insurance company denied, changed, or delayed a service or treatment because they deemed it not "medically necessary". An IMR is a free review conducted by an independent medical professional to determine if the insurance company's decision was justified and reasonable. The independent medical professional will rely on various sources, including peer-reviewed scientific and medical evidence, recognized standards for medical professionals, and expert opinions. If the IMR organization determines that the insurance company acted improperly, a written decision will be issued compelling the company to change its conduct. However, it is recommended to consult an experienced health insurance lawyer before filing an IMR, as these decisions can be difficult to overturn.
Legal Action
Another option for challenging a denial is to file a legal action in a court of law. This can be done before or after seeking an IMR and can put immediate pressure on the insurance company to reassess the denial. Consult a health insurance lawyer to help you file an appeal and fight for the coverage you deserve, especially if the amount in controversy is large.
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Hiring a lawyer
Dealing with insurance companies can be stressful, especially when your focus is on receiving the medical care you need. Healthcare claims are often complex, and it is important to consult with a lawyer who focuses on health insurance claims and has the expertise and knowledge to get your claim approved. A health insurance lawyer can help you fight for the coverage you deserve.
A health insurance benefits lawyer’s job is to get your claim paid by proving that your health insurer wrongfully denied your claim. The lawyer can step in at any stage after you submit your claim, including during your internal appeal process with the health insurer. The lawyer can also initiate and litigate your lawsuit seeking payment of your claim. Your lawyer’s expertise will allow them to interpret and apply the perplexing terms of your health plan to the specific facts of your case. Hiring a lawyer also increases your chances of success by ensuring that your insurer plays by the rules.
If your claim for medical benefits has been denied due to an alleged lack of medical necessity, a health insurance lawyer can help you fight this. "Medical necessity" is usually defined as a medical service or treatment that is required and cannot be safely provided in a more efficient or economical way. However, Private insurers without Medicare plans can define medical necessity for themselves, establishing their own criteria. If your insurer denies your treatment on these grounds, you should not take that denial lying down.
If you have disability insurance coverage through your employer, it is probably governed by the Employee Retirement Income Security Act (ERISA), a federal law that regulates employee benefit plans. ERISA imposes a strict framework for challenging a denial for lack of medical necessity. If your health insurer upholds its denial of your claim despite your appeal(s), you may file a lawsuit immediately. However, for group health plans subject to the federal ERISA statute, you may only sue your health insurance company after you have exhausted the written appeals process set forth in your health insurance plan.
You are entitled to a cost-free, external review if your health plan provides for such a review. That review is conducted by an independent review organization (IRO). An experienced healthcare lawyer can help guide you through this process. An IMR is a free review of an insured person by an independent medical professional to determine if a medical decision made by an insurance company was justified and reasonable. If the IMR organization determines that the insurance company acted improperly, then the CDI or DMHC will issue a written decision compelling the insurance company to change its conduct. However, because an IMR decision can be difficult to overturn, it may be worth speaking to a lawyer before filing one.
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Independent medical reviews
When an insurance company denies, changes, or delays a service or treatment, citing a lack of "medical necessity," individuals can initiate an IMR to challenge this determination. The independent medical professional conducting the IMR will consider various sources, including peer-reviewed scientific and medical evidence, recognised standards for medical professionals, and expert opinions, to determine whether the insurance company's decision was reasonable and justified.
The process of requesting an IMR typically involves submitting a request form, which can often be done online or via mail, fax, or email. The review organisation is then assigned, and individuals may provide additional information to support their case. It is important to note that the review organisation will be comprised of doctors and health professionals specialising in the relevant area of healthcare, ensuring a thorough understanding of the case and necessary treatment.
The IMR process is designed to be impartial and unbiased. For example, in Pennsylvania, the state certifies that there are no conflicts of interest between the independent review organisation and the insurer. Additionally, the insurance company is responsible for paying for completed reviews, ensuring that individuals do not bear any financial burden for seeking an IMR.
If the IMR organisation determines that the insurance company acted improperly, the relevant regulatory body will issue a written decision compelling the insurance company to change its conduct. However, if the IMR determination is unfavourable, individuals still have options. They can seek legal advice and explore alternative routes, such as filing a lawsuit, to challenge the denial.
In summary, independent medical reviews provide a crucial mechanism for individuals to challenge insurance denials based on "medical necessity." By seeking an IMR, individuals can ensure that their cases are reviewed by independent medical professionals, potentially overturning improper denials and receiving the coverage they rightfully deserve.
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Bad faith insurance denial
Health insurance companies provide coverage only for healthcare services that are deemed medically necessary. This means that the service is necessary for diagnosis or treatment and that the services meet accepted standards in the medical community for medical practice and treatment.
However, "medical necessity" is a peculiar concept, as it allows health plans to weigh economic considerations against medical ones. This creates a conflict of interest, as health plans both evaluate and pay claims. As such, health insurance providers often rely on "medical necessity" when denying insurance claims.
When an insurance company deliberately undervalues your claim, wrongfully denies your claim, or engages in a pattern of behaviour intended to limit their payout on your claim, you may have a claim for bad faith. Bad faith insurance refers to the wrongful actions of an insurance company towards its policyholder. There is a duty of good faith inherent in every insurance contract. Under bad faith law, insurers are obligated to handle claims fairly, honestly, and promptly. When an insurance company unreasonably denies a legitimate claim or engages in misrepresentation, it may be deemed to have acted in bad faith.
If your insurer denies your treatment on the grounds that it is not medically necessary, you should not take that denial lying down. If your physician recommends a course of treatment as necessary, and your insurer denies coverage for that treatment, they may be deliberately ignoring both the facts of your medical condition and the clear recommendations of your physician. In such cases, you can seek an IMR (a free review of an insured person by an independent medical professional) to determine if a medical decision made by an insurance company was justified and reasonable. If the IMR organization determines that the insurance company acted improperly, then the CDI or DMHC will issue a written decision compelling the insurance company to change its conduct.
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Preauthorization and claims filing errors
Understanding Preauthorization: Preauthorization, also known as prior authorization or prior approval, is the process of obtaining approval from the insurance company before a specific medical procedure, treatment, or service is provided. Each insurance company has its own guidelines and criteria for determining which services require preauthorization. It is important to review the insurance plan's requirements and restrictions to ensure compliance.
Communicating with the Insurance Company: Effective communication with the insurance company is essential to obtaining preauthorization. This includes providing detailed information about the patient's condition, the recommended treatment, and the medical necessity of the procedure. It is advisable to document all communications with the insurance company, including dates, times, representative names, and reference numbers. This documentation can be crucial in the event of a dispute or denial.
Providing Supporting Documentation: When requesting preauthorization, it is important to provide comprehensive supporting documentation. This may include medical records, test results, consult notes, and letters of support from treating physicians explaining the medical necessity of the treatment. Additionally, peer-reviewed medical journal articles or other resources addressing the inadequacy of alternative treatments can strengthen the request.
Following Up on Denials: If a claim is denied due to preauthorization issues, it is important to understand the reason for the denial. Communicating with the physician's office and gathering additional information or supporting documentation can be helpful. In some cases, an appeal can be filed, and providing detailed information or new evidence to support the request may lead to a successful outcome.
Utilizing Available Resources: Many medical practices choose to work with authorization experts or utilize specialized software to minimize denied claims. These experts or software solutions can handle the complex process of obtaining preauthorization, including medical coding and insurance verification, reducing the administrative burden on medical staff.
By understanding the preauthorization process, effectively communicating with insurance companies, providing comprehensive supporting documentation, and following up on denials, patients and medical providers can reduce the likelihood of claims being denied due to preauthorization and claims filing errors.
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Frequently asked questions
Medical necessity is a concept that allows health plans to weigh economic considerations against medical ones. It is a requirement by health insurers before providing coverage or preauthorization for any procedure, treatment, or medical supply. Medical necessity is usually defined as a medical service or treatment that is required and cannot be safely provided in a more efficient or economical way.
If your insurance company denies your claim on the basis of medical necessity, you can file an appeal with the insurer itself. You will need to provide a letter written by you or your doctor explaining why the denial was improper. You can also request a written rationale for the denial and use this to file an official appeal.
An IMR (Independent Medical Review) is a free review of an insured person by an independent medical professional to determine if a medical decision made by an insurance company was justified and reasonable. You can seek an IMR if your insurance company denied, changed, or delayed a service or treatment because of a determination that it was not medically necessary.
You do not need a lawyer to appeal a denial of health benefits. However, it may be prudent to hire one depending on the amount of money involved. A lawyer can help you determine what additional evidence or argument is needed to perfect your appeal. They can also counsel you on alternative methods of resolving the dispute, such as negotiating a reduction or payment plan with the provider.
