How to Appeal a Health Insurance Claim Denial – Forbes Advisor

A health care provider usually files a claim with your health insurance company after you have received treatment, services, medications, or medical goods. 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 claim appeal process if you believe your health plan should pay for that care.

What is a health insurance claim?

A health insurance claim is a request for payment submitted by you or your health care provider to your health insurance company after you have received services, treatment, medications, or medical goods 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 these costs.

Your insurer may deny the claim and refuse to pay or reimburse for services or treatment. The Kaiser Family Foundation estimates that 18% of in-network health insurance claims were denied by health insurance companies in the Affordable Care Act marketplace 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 treatment, service, medication 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 coverage has expired or you are no longer registered with the insurer.
• A documentation or data entry error prevented the claim from being processed properly.
• The request was not submitted on time.

Rejected Claims vs. Rejected Claims

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

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

Patients or providers are usually notified of a denied claim through a mailed or emailed Explanation of Benefits or Electronic Remittance Advice. Insurers will usually explain why they rejected a claim when they return the rejected claim to the submitting party. Most denied claims can be appealed.

Rejected claims must be corrected and resubmitted by you or your healthcare provider. If they are ultimately denied, the denied claims will most likely be appealed.

What is an expedited appeal?

You can ask for an expedited appeal if you believe that waiting for a claim decision 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 function. In this case, you can file an internal appeal and a request for external review at the same time.

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

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

Two ways to appeal a denial of a health insurance claim

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

Internal review

An appeal for internal review, also called an “appeal procedure,” is a request for your insurer to review and reconsider its decision to deny coverage for your claim. You have the right to make an internal complaint. By doing so, you are asking your insurer to carry out a fair and thorough review of their decision.

External review

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

Steps involved in appealing a denial of a health insurance claim

Step 1: Find out why the request was rejected

If you have received notice from your insurer that your claim has been refused, read the correspondence carefully, including any Explanation of Benefits offered.

Your insurer is legally required 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 urgent care issues. .

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 believe your insurer denied your claim. It could simply be a problem with the provider’s office entering the wrong payment code.

Ask them to verify that the treatment or service provided was medically necessary and that the correct 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 state the steps required for an appeal, deadlines for filing an appeal, and how and where to file an appeal. Call or email your insurer if you are missing these documents.

Step 4: Write and submit an internal appeal letter

Draft an appeal letter with all the relevant facts, details and arguments necessary to defend your claim. Be as factual, concise and respectful as possible. Do not be threatening, hostile or abusive in your words or tone.

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

Step 5: Check back with your health insurance company

Review your policy about how long you can expect to wait before your insurer reviews and issues a decision on your appeal. 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 an appeal for external review if necessary

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

Ask your insurer how to formally submit an external review.

Step 7: Contact your state

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 assist you with an external review of a claim denial.

How long can you appeal a claim rejection?

You have a maximum of six months (180 days) to file an internal complaint after you learn that the request has been denied.

If you submit a written request for an external review, this must be done within four months of the date you received a notice or final decision from your insurer that your request has been refused.

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

While the timeframe may vary depending on your state’s laws, after filing an appeal 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 your internal appeal is for a service you have already received
• 45 days for standard external reviews
• 72 hours for fast external reviews
• 7 calendar days for requested experimental or investigational treatments or services

What is the law without surprises?

Congress passed the surprise-free law that went into effect in January 2022.

The legislation was intended to lessen the impact of unexpected medical bills on group health insurance and individual health insurance plans. The No Surprises Law prohibits:

• Unexpected 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 and balance billing for additional care, including anesthesiology, from out-of-network providers who work at an in-network facility

The legislation means that you will not be responsible for these types of common charges that lead to unexpected 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 the applicable unexpected medical bill rates. They may need to go through an independent dispute resolution process if they cannot reach an agreement, but you as a member will not be affected.