Navigating the complex world of medical billing and insurance can be overwhelming, especially when dealing with claim denials. However, it’s important to take action and address mistakes or errors in billing to avoid overpaying for medical services.

In this article, we’ll guide you through the steps to take when faced with insurance claim denials, including understanding the type of denial, knowing your rights and benefits coverage, reading your policy, and appealing denials. By arming yourself with the right knowledge and tools, you can take control of your medical bills and ensure that you receive the coverage you are entitled to.

We want you to be able to take care of your medical bills and not have them lead to collections, bad credit scores, or even lawsuits. 

My Health Insurance Claim Was Denied – What Next?

Step One: Determine the Type of Denial

Believe it or not, some insurance denials are legitimate. However, some are due to insurance plan errors. The most common reasons insurance companies deny claims (bills) include:

• Out-of-network services
• Not medically necessary or experimental and investigational services

I’ve talked about why it’s important to challenge balance billing. It’s just as important to dispute “not medically necessary” and “experimental and investigational” denials. One all-too-common reason for claims being declined is human error on the part of the medical billing department, or even computer error. When you have been denied insurance coverage, you need to track down the exact reason why the decision was made. 

This is going to require phone calls to the health insurance company, which can be hard, but it’s easier than paying an unnecessary medical bill.

Step Two: Know your rights. Learn about your benefits coverage.

Wouldn’t it be nice if the stress caused by trying to figure out your benefits was covered by your insurance plan? It’s challenging to understand our medical bills and insurance Explanation of Benefits (EOB). But to know your rights and what you’re covered for and what you’re not, you have to carefully study your insurance policy.

Insurance plans guarantee to pay for approved medical charges— not all medical charges. And this doesn’t just mean they want you to pay the deductible or copay. There are simply parts of the medical bill that insurance won’t pay. 

For example, if you have a commercial plan with 20% coinsurance, this doesn’t mean the plan will pay for 80% of all your bills. It means the plan will pay for 80% of the “usual and customary” price of approved or allowed medical services.

Read your policy.

 If you have healthcare insurance, you have to understand your plan benefits. To understand your plan benefits, you have to read your policy.

Read your policy. The whole thing, from beginning to end.

We know It’s about as much fun as watching paint dry and almost as painful as getting a bad tooth pulled, but if you have medical insurance, it’s a critical part of not overpaying medical bills.

Pay special attention to:

• What your plan pays (benefits)
• What your plan does not pay (exclusions)
• How much the annual (yearly) deductible is
• How much the coinsurance is
• How much the copays are
• How much, if at all, the plan covers out-of-network services
• Whether there is an out-of-pocket maximum
• How much physical therapy the plan might pay for 
• What prior authorization is needed
• What is defined as a medical necessity

How to Fight Health Insurance Claim Denials

It’s easiest to call the insurance company at the number on the back of your card to correct the mistakes you’ve found. In some cases, though, the customer service representative(s) you speak with will advise you that the denied service(s) can only be corrected by a formal appeal.

How to Appeal Commercial Insurance Denials

Within two months of the date you receive a notice from your plan that your claim has been denied:

• Get the Explanation of Benefits (EOB) and find the service or item you’re appealing.
• Circle the service(s) or item(s) you disagree with.
• Get backup

What is the backup? 

Backup from your provider

Get your provider on board. Ask your provider to submit an explanation saying why they disagree with the decision. Providers, especially your doctors, want to help you get their bills paid by your insurance and will work with you. 

Call your physician’s office and ask to speak with the manager or biller. Your doctors are going to be able to submit what’s called a “provider appeal,” which is usually the first step to formally request your insurers to reconsider the denial of the doctor’s services. 

Each insurance company has its own unique requirements to submit an appeal. Because physician office managers and billers work with these companies all day every day, they’re best equipped to help file an appeal for you correctly. Make a copy to keep for your records.

Make a second copy and send it to the address on the EOB.

Sometimes health care insurance plans offer a two-step appeal: a “provider” appeal, and then, if the denial is upheld (the denied service is still not going to be paid), a “member” appeal:

• Briefly write out the problem (the denied service) and that you’ve asked once already without success.
• Most importantly, ask your doctor to rephrase the explanation stating why they disagree with the decision. (Sometimes stating your case in a different way can make a big difference.)
• Send a copy of the original or first appeal and any possibly related information to the address indicated in the decision letter.

Backup From Your Employer

If your insurance is through your job, sometimes your employer can help.

There are large companies that will assist or even intervene in cases of denials for medical services. Some very large companies that self-insure have a representative employed by the insurance plan to work with you regarding disputes. Ask your HR department for the contact information of the company’s representative with the plan. Call and email the representative to request assistance with how to handle the denied medical claims. 

Backup From A Review Organization

If your appeal of the decision to the insurance company is denied, appeal to an Independent or External Review Organization (IRO or ERO). These are consumer assistance programs that can aid in the appeals process. 

An external reviewer will either uphold your insurer’s denial or overturn and allow the service in your favor. Insurance companies in all states are required by law to accept the external reviewer’s decision.

You have to file a written request for an external review within 4 months from the date you receive a notice or final determination from your insurance that your claim has been denied.

Look at the information on your Explanation of Benefits (EOB) or on the final denial of the internal appeal by your health plan. It’ll give you the contact information for the organization that will handle your external review.

How to Appeal Medicare Denials

Medicare requires you to file appeals within 4 months from the date you get the Medicare Summary Notice.

1. Get the Medicare Summary Notice (MSN) and find the service or item you’re appealing.
2. Circle the service(s) or item(s) with which you disagree.
3. Write an explanation of why you disagree.
4. Write your name, phone number, and Medicare number on the MSN and sign it.
5. Make a copy to keep for your records.
6. Make a second copy and send it to the company on the MSN that handles bills for Medicare.

If your Medicare appeal is not successful, your case gets automatically forwarded to an Independent Review Entity (IRE). If your IRE appeal is denied, the next level of appeal is to the Office of Medicare Hearings and Appeals (OHMA).

Your final opportunity to appeal a Medicare coverage denial is to file a lawsuit in Federal District Court. You may need an attorney for this. Check your local Bar Association for pro bono (free) services available in your area.

Takeaways

Dealing with insurance claim denials can be a daunting and frustrating experience, but it’s important to remember that you have options. By understanding your policy, knowing your rights, and taking the necessary steps to appeal denials, you can increase your chances of getting the coverage you need and avoid unnecessary financial burden. Remember to keep records of all communications with your insurance company and providers, and don’t hesitate to seek external review if necessary. 

With patience, persistence, and the right tools, you can successfully navigate the world of medical billing and insurance claim denials.
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