5 Steps for Handling a Denied Claim
Most people have a hard time facing rejection – especially when it’s their health insurance breaking their heart. We always assume that insurance will come through for us – helping pay our expenses so that we can stay financially afloat – but many times they don’t. According to AARP, 200 million claims get denied every year, sticking many consumers with unexpected medical bills that they aren’t able to pay. Fortunately, they might not have to pay them…Here are 5 steps that you can follow for dealing with denied claims:
Step 1: Find out why
Insurance companies are required to tell you why your claim was denied, which is good because there are so many possible reasons…You may not have met your deductible…Your claim may have been submitted after the timely filing deadline…Your procedure may not have been deemed “medically necessary”…etc., etc.
Insurance will usually include the reason why it denied your claim in your rejection letter. Once you find out what it is, your job is to determine whether there is anything to it.
Step 2: Rule out mistakes
According to Nancy Davenport-Ennis, cofounder and CEO of the Patient Advocate Foundation, insurance companies are far from perfect. She says that in 2005 the PAF did an audit of all the cases they had worked on and they found that “96% of the claims denied by the plan representative were fully covered benefits”.
You may be wondering, “What’s with all the blunders?” The mistakes may be a combination of coding errors, which are common in the healthcare industry, and pure genius. “With many major health plans, it is routine to deny coverage on the first submission,” says Davenport-Ennis. Why? Because they would much rather have you foot the bill. While a simple phone call to the insurer is usually enough to straighten out an erroneous claim denial, plenty of people don’t bother to dispute the denial and end up paying for something they shouldn’t be.
Step 3: Do your research
One reason people decide not to dispute their claim denials is because they’re afraid of a little work – but you’re not afraid of a little work – are you? If not, you should start by combing through the insurer’s explanation of benefits, a statement showing which expenses they covered and which they didn’t. You can then cross-reference the EOB with your insurance policy to see if anything that was not covered should have been. If you don’t find that the insurance company has made any glaring mistakes, then you can file for an internal appeal.
Each insurance company has a different appeal process, so it is important that you read up on how your insurer does things. For most insurers, the deadline to file an appeal is about 6 months, so you’ll need to act quickly.
Step 4: Ask for help
In an internal appeal, you’re trying to show the insurance company that they shouldn’t have denied your claim. To accomplish this, it is usually helpful to enlist the help of doctors or other medical personnel. These people are more accustomed to dealing with insurance companies and may be able to provide letters or documentation to strengthen your case.
Who you ask for help will depend on your situation. For example, if you get your health insurance through your employer, you will want to reach out to your company’s human resources department. Hospitals often staff social workers to help patients who are dealing with their health insurance companies, so If you were treated by a hospital, this may be the way to go.
Step 5: Keep on trying
AARP reports that about half of all denials get successfully appealed, but say yours doesn’t. If your first appeal is unsuccessful you are allowed to file a second appeal, and possibly more afterward. Even after you have exhausted the internal appeal process, you can still file for an external appeal, in which a third party, instead of the insurer, reviews your case.
Persistence is crucial when you’re disputing a denied claim. The more pressure you put on the insurance company, the more likely they’ll want to compromise.
Remember – the squeaky wheel is the one that usually gets the grease.