How to Appeal a Health Insurance Claim Denial – Forbes Advisor

A health care provider typically files a claim with your health insurance company after you receive medical treatment, services, drugs, or products. The insurance company reviews the claim and decides if your health plan covers the service and how much the provider should be reimbursed. That decision influences how much you pay.

A health insurance company might deny a claim or pay much less than you expected. But there is a health insurance claim appeal process if you think your health plan should pay for that care.

What is a health insurance claim?

A health insurance claim is a request for payment by you or your health care provider to your health insurance company after receiving services, treatments, medications, or medical products 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 may deny a claim for many reasons, including:

• The treatment or service is not considered medically necessary or appropriate.
• The plan does not cover the treatment, service, drug 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 enrolled with the insurer.
• A paperwork or data entry error prevented the claim from being processed correctly.
• The lawsuit was not filed on time.

Denied Claims vs Rejected Claims

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

• A denied claim is one that the insurer determines is not payable. These claims may be unpayable due to vital errors or violate the provider’s contract.
• A denied claim has one or more errors discovered before the claim was processed, often because information was missing or incomplete on the claim form.

Patients or providers are typically notified of a denied claim through a mailed or electronic Explanation of Benefits or an electronic Payment Notice. Insurers will usually explain why they denied a claim when they send the denied claim to the party who filed it. Most denied claims can be appealed.

Denied claims must be corrected and resubmitted by you or your health care provider. If they are ultimately denied, the denied claims can most likely be appealed.

What is an expedited appeal?

You can request an expedited appeal if you believe that waiting for a claim decision could put your health at risk, for example, if you urgently need medication or are currently in the hospital.

An expedited appeal is allowed if the time frame for the standard appeal process would materially jeopardize your life or your ability to regain maximum function. In this case, you can file an internal appeal and a request for external review simultaneously.

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

Expedited appeal decisions are usually given quickly, depending on the urgency of the patient’s health condition. In most cases, this decision is made within three calendar days from the date the appeal was initially received.

Two ways to appeal a health insurance claim denial

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

Internal review

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

external review

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

Steps Related to Appealing a Health Insurance Claim Denial

Step 1: Find out why the claim was denied

If you received notification from your insurer that your claim was denied, please read the correspondence carefully, including any Explanation of Benefits provided.

Your insurer is required by law 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 attention.

If the explanation is unsatisfactory or unclear, try contacting your insurer and get more information. Carefully document any communication with your insurance.

Step 2: Ask your doctor for help

Contact your doctor’s office and ask why they think your insurer denied your claim. It could just be a problem like the provider’s office entered the wrong payment code.

Ask them to verify that the treatment or service provided was medically necessary and that the appropriate 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 you submitted, and possibly a new letter from your doctor requesting that the claim be accepted based on your assessment of the situation.

Step 3: Learn how and when to appeal

Review your health insurance policy, which should state the steps needed to appeal, the timeframes for filing an appeal, and how and where to file the appeal. Call or email your insurer if you do not have this documentation.

Step 4: Write and file an internal appeal letter

Draft an appeal letter with all the pertinent facts, details, and justification needed to support 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 offers a sample internal appeal letter.

Step 5: Check back with your health insurance company

Check your policy regarding how long you must wait before your insurer reviews and issues a decision on your appeal. After that time has elapsed, or if in doubt, contact your insurance company to check the status of your appeal.

Step 6: File an external review appeal if necessary

If your internal review appeal has been denied and your claim is still not approved, consider filing an external review appeal. This must be filed within four months of the date you received a final determination or notice from your insurer that your claim was denied.

Ask your insurer how to officially file an external review.

Step 7: Contact your state

If you’ve exhausted the appeal process with your insurer, contact your state insurance department, attorney general’s office, or consumer affairs office. States can help you with an external review of the claim denial.

How long can you appeal a claim denial?

You have up to six months (180 days) to file an internal appeal after learning the claim was denied.

If you submit a written request for an external review, you must do so within four months of the date you received notice or a final determination from your insurer that your claim has been denied.

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

Although the time frame may vary depending on the laws in your state, after you file an appeal, you should expect to get a response or decision on your appeal 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 already received
• 45 days for standard external reviews
• 72 hours for expedited external reviews
• 7 calendar days for requested experimental or investigational treatment or services

What is the No Surprises Law?

Congress passed the No Surprises Act which went into effect in January 2022.

The legislation sought to ease the pain of surprise medical bills for group health insurance and individual health insurance plans. The No Surprises Law prohibits:

• Surprise bills for emergency services from an out-of-network provider or facility without prior authorization
• Out-of-network cost sharing, including copays and coinsurance, for emergency services and some non-emergency services
• Out-of-network and balance bills for ancillary care, including anesthesiology, from out-of-network providers working at an in-network facility

The legislation means that you will not be responsible for these types of common charges that lead to surprise medical bills. You still have to pay your usual in-network costs, but the health care provider and health insurance company must negotiate payment of any applicable surprise medical bill charges. They may have to go through a separate dispute resolution process if they can’t come to an agreement, but you as a member won’t be affected.