How to Appeal a Health Insurance Claim Denial

Measures from the recently passed health care reform bill are going into effect this year, including a new process of appealing a health-claim denial. Many people find that their claims for coverage are denied, even though they believe that insurance should cover the cost. There is an appeals process in place, but in many cases states do not provide assistance, and if the insurance is a self-funded plan from your employer, insurers aren’t required to worry about state law at all. This changes, though, on September 23, 2010. Instead of having to turn to your state, or to the Pension and Welfare Benefits Administration in the Department of Labor to help you appeal a health-claim denial, you will be able to take your case to an independent panel of experts that will assess the claim.

Before You Make a Claim

Before you even make a claim on your health insurance, make sure you understand the coverage. In some cases, you need pre-authorization for some procedures and specialist appointments. Before you go in, check your plan documents (which will have to be easier to read under the new law) to ensure that you are following proper procedure. You can call the insurer to get clarification if necessary. Make sure you get copies of all paperwork involved. Sometimes insurance companies deny the claim — even after issuing authorization.

What to Do When Your Health Claim is Denied

The first thing you need to do is review the denial of claim letter you are sent, and identify the stated reason for denial. Make a note of why you think the claim should be paid, and round up supporting documentation. Next, call your insurer to talk about. If human error was involved, it is fairly easy to fix the problem, and you are done. If this is the case, make sure you take notes of the conversation and outcome, and record the date and time, as well as who you spoke with. Sometimes all you will be given is an extension. Note this down. Be sure to follow up to make sure the claim is paid.

If your health insurance claim denial was not due to error, then you have a little more work to do. Until September 23, you will have to look at the type of insurance you have, and respond accordingly, either going through a state review board or contacting the Pension and Welfare Benefits Administration. After September 23, if the insurance company denies your claim for a second time (after your initial appeal and attempt to re-submit the claim), it will have to inform you of your right to independent review.

If you want the claim denial reviewed by an independent panel, you will need send a letter requesting review. You have four months to send this letter. Your letter should include the following information:

  • Your name, address, phone number.
  • Claim number.
  • Why the denied procedure, specialist visit or medication is necessary.
  • Why your insurance policy should pay the costs.

You should also include supporting documents with your letter. This includes notes from your health care provider, lab results, x-rays and other relevant documents that bolster your case. Send this information, and the letter, in one packet via certified mail. Request a return receipt. This costs a little more, but you want evidence that the insurer received your request. Otherwise, it is easy for your documents to get “lost.” As always, keep your own copies of everything you send for your records.

Expedited Review

Under the health care reform law, your appeal has to be reviewed by the independent panel, and a decision made, within 45 days of the insurer receiving your request. If your health demands the treatment quickly, it is possible to request an expedited review to be completed within 72 hours. However, you will need to show evidence that your health really is in jeopardy before you are approved for expedited review.

If you are looking for the current state requirements for health insurance claim denial prior to September 23, 2010, you can get that information from the Kaiser Family Foundation.

Bottom Line

It isn’t the end if your insurance company denies your claim. You can appeal now, and after September 23 it will become a little easier to appeal. Of course, if the independent review board upholds the insurance company’s denial, then you have little recourse. You can sue, but that might be too costly, on top of medical bills. You will have to assess your situation in that instance. However, it doesn’t hurt to appeal a denied health insurance claim if you have a legitimate reason for believing the company should pay.

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About the Author

By , on May 21, 2010
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

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Leave Your Comment (4 Comments)

  1. Sara says:

    FYI, the Pension and Welfare Benefits Administration changed its name to the Employee Benefits Security Administration back in 2003.

  2. Jerry says:

    I had a claim denied with my insurance and it made me so angry because it was my understanding that it was covered. It did lead me to dispute it but they said it came under a pre-existing condition. It was still really frustrating.

  3. Since the federal government is the largest denier of claims in the country, what is the recourse there?

    I’m an Obamacare loser. My health insurance will be significantly worse after this legislation is fully enacted so I am not a happy camper.

  4. An informative article on the important financial aspect of insurance claims. This post contains information which can come in handy during claim denial. The time limit for writing letter of appeal should be strictly followed.

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