Denied Claims: Insurance Payment Refusals

If your insurance carrier denies payment, you will be notified in writing, and they must explain your right to appeal their decision. You will also be informed of how to dispute their decision. If your claim has been denied, you have the right to appeal and ask your insurance company to conduct a full and fair review of its decision. If the case is urgent, your insurance company must speed up this internal appeal process. If you are still unsatisfied, you can take your appeal to an independent third party for an external review.

You have the right to appeal

If your insurance claim has been denied, you have the right to appeal the decision. This is a multi-step process that requires careful attention to detail and deadlines. Here is a guide on what to do:

Step 1: Understand the Reason for Denial

Before you can appeal, you need to know why your claim was denied. Review the denial letter from your insurance provider, which should outline the specific reasons for the denial. Common reasons for claim denials include errors in the claim filing, services not being covered by your plan, services not being deemed medically necessary, or reaching the coverage maximum of your plan. Understanding the reason for the denial will help you address it effectively in your appeal.

Step 2: Contact Your Insurance Provider

Call your insurance provider to discuss the denial and review your appeal options. Each insurance company has its own specific appeals process, so it's important to understand the steps, forms required, and deadlines involved. Ask about the internal appeal process and how to initiate it.

Step 3: Contact Your Doctor's Office

In some cases, a claim may be denied due to missing or incorrect information on the claim form. Contact your doctor's office to verify if all the necessary information was provided, and request them to resubmit the claim with any necessary corrections. Ask your doctor to provide supporting documentation, such as a letter explaining the medical necessity of the treatment or service.

Step 4: Gather Relevant Paperwork

Collect all the documentation related to your claim, including the claim denial letter, original bills and documents related to the service, notes and dates from communications with your insurance company and doctor's office, and any other supporting evidence. This paperwork will be crucial for your appeal process.

Step 5: Submit an Internal Appeal

You have the right to request an internal appeal directly from your insurance company, asking them to reconsider their decision. Prepare an appeal letter that clearly and concisely outlines the service that was denied, the reasons why your claim should be paid, and any supporting evidence, such as medical records or letters from your doctor. Remember to keep your emotions in check and focus on the facts when writing the letter.

Step 6: Await the Decision

Your insurance provider is required to respond to your internal appeal within a specified timeframe. For coverage of a treatment you have not yet received, they must decide within 30 days. If you have already received treatment, the timeframe is extended to 60 days. In urgent care situations, they must provide a decision within 72 hours.

Step 7: Proceed with an External Review (if necessary)

If your internal appeal is rejected, you can take your appeal to the next level by requesting an external review. This involves submitting your case to an independent third party for a full review and final decision. The external reviewer is not affiliated with your insurance company, and their decision is binding. Information about your external review options and contact details should be provided in your Explanation of Benefits (EOB).

Additional Considerations:

• If you require urgent treatment or medication and believe that waiting for a standard appeal decision may put your health at risk, you can request an expedited appeal.
• You have the right to work with an attorney at any point during the appeal process, especially if you believe your insurance company is acting in bad faith or engaging in unfair practices.
• Remember to keep detailed records of all communications, documents, and deadlines related to your appeal.

Review the denial letter

If your insurance claim has been denied, the insurance company is required to notify you of this decision in writing. This is usually done through a denial letter, which you should review carefully to understand the reason for the denial and your next steps for appealing the decision. Here are some key points to keep in mind when reviewing the denial letter:

• Reason for denial: The letter should clearly state the specific reason why your claim or coverage request was denied. Common reasons for denial include the service being deemed not medically necessary, ineligibility for the requested benefit under your plan, or untimely filing of the claim. Understanding the reason for the denial will help you determine your next steps and whether you have grounds for an appeal.
• Right to appeal: The denial letter should inform you of your right to file an appeal against the insurance company's decision. You typically have the right to request an internal appeal, where you ask the insurance company to reconsider its decision, and/or an external review, where an independent third party reviews the decision.*
• Instructions and deadlines: Pay close attention to the instructions and requirements for submitting an appeal, including any deadlines. The letter should outline the steps you need to take to initiate the appeals process, such as completing specific forms or providing additional information.
• Consumer Assistance Program: The denial letter should also include information about any available Consumer Assistance Program (CAP) in your state. These programs can provide support and guidance in filing your appeal.
• Additional resources: Keep in mind that you may have the option to seek legal assistance or contact a state insurance regulator if you need further help beyond the internal appeals process.

Remember to keep a copy of the denial letter and any other relevant documentation for your records. It is important to act promptly and follow the outlined steps to protect your rights and increase the chances of a successful appeal.

Reasons for denial

There are several reasons why an insurance carrier might deny a claim and refuse payment. Understanding these reasons can help you identify if you have been denied and also help you navigate the process of appealing a denial, if necessary.

Firstly, insurance carriers may deny a claim if the treatment or service provided is not covered by the policy. This could be due to a specific exclusion in the policy, such as pre-existing conditions or cosmetic procedures. It could also be that the service or treatment is not considered medically necessary by the insurance company. For example, if a patient receives physical therapy for a sprained ankle, but the insurance company deems that particular therapy as unnecessary, they may deny the claim.

Secondly, procedural errors can also lead to denied claims. These could include issues like a missed deadline, incomplete or incorrect information on the claim form, or a lack of proper authorization or referral for a service. For instance, if a patient's doctor fails to provide the insurance company with the necessary medical records to support the claim, the insurance carrier may deny the claim until those records are provided.

Thirdly, issues with provider network status can also result in denied claims. If a patient receives treatment from a provider outside of their insurance company's network, known as an "out-of-network" provider, their insurance coverage may not be accepted or reimbursed at the same rate as an in-network provider. This could result in higher out-of-pocket costs for the patient or even a denial of coverage.

Lastly, coordination of benefits is crucial when a patient has multiple insurance policies. In these cases, insurance carriers need to coordinate which plan takes primary responsibility and how much coverage is provided by each. If this coordination breaks down, a claim may be denied, leaving the patient with unexpected costs.

It is important to remember that a denied claim does not necessarily mean the patient is responsible for the full cost of the treatment or service. There are often avenues to appeal the insurance carrier's decision, and understanding the specific reason for the denial is the first step in this process.

Your insurer must notify you

If your insurance claim is denied, your insurer must notify you in writing, explaining why your claim was denied and outlining your rights to appeal their decision. This letter should also detail the specific reasons for the denial of your claim or coverage request, as well as instructions on how to submit an appeal.

In the United States, health insurers must notify you of their decision within 15 days for prior authorization, within 30 days for medical services already received, and within 72 hours for urgent care cases. If your insurer fails to notify you within these timeframes, they may be found to be acting in bad faith.

Your insurer's notification letter should also include information on your right to file an appeal and the availability of a Consumer Assistance Program (CAP) in your state. This program can provide additional support and guidance in filing your appeal. It is important to review the denial letter carefully to understand the specific reasons for the denial and the next steps you can take.

Additionally, your insurer must provide you with all the information related to their decision, such as the name of any experts consulted. This transparency ensures that you have a comprehensive understanding of the factors that led to the denial of your claim.

Seek legal counsel

If your insurance claim has been denied, you may want to seek legal counsel, especially if you believe the insurance company has acted in bad faith. An insurance attorney can help you understand what is going on and guide you through the appeal process. While you can work through the appeals process with your insurance company without legal counsel, you may benefit from having an attorney who understands the process build a strong case on your behalf. Keep in mind that the appeal process can be time-consuming, so working with an attorney can be most efficient.

Even if your appeal is denied, you and your attorney can contact a state regulator or your state ombudsman to resolve the conflict. You can also file a complaint against your insurer. Working with an attorney can clarify this process for you.

If you are struggling to get a payout from your insurance company that you feel you deserve, consider contacting an insurance attorney. Insurance companies have entire departments of attorneys on their side, so it may be beneficial to have an attorney with experience in this field on your side as well.

If you believe the insurance company has made a mistake in denying your valid claim, it is important that you do not immediately think about filing a lawsuit. In many cases, it is possible to work out the problem with the insurance company and have your claim settled in a timely fashion. Your first step is to carefully review the denial letter that the insurance company sent you and understand why your insurance company denied your claim. This will help you more directly address their concerns.

If you believe that the insurance company is acting in bad faith, you should immediately contact an attorney. You can sometimes solve these problems with the help of a lawyer before launching a lawsuit. Remember that insurance companies are for-profit businesses. They hate losing money. If they see that you are not going to be put off by their denials and that you consider suing them for their actions, it may be cheaper for them to settle with you. They can then avoid paying all the expenses that are involved in a lawsuit, such as attorney fees, court costs, and perhaps a higher settlement than anticipated.

If you believe your valid claim was denied for any of the following reasons, you probably have grounds for suing the insurance company:

• Incomplete, delayed, or inadequate investigation of your claim
• Refusal to pay what the policy dictates when your claim is clearly valid
• Unreasonable delay in the approval of a valid claim
• Denial of a claim without any reasonable explanation or no explanation at all
• Refusal to defend you when you are the subject of a liability lawsuit when a liability policy covers the claim

Frequently asked questions