If your medical insurance claim has been denied, it can feel overwhelming and frustrating, but it’s important to know that you have options. A denial doesn’t necessarily mean the end of the road for coverage. Whether the issue lies in a technical error, insufficient documentation, or a misunderstanding of your policy, there are steps you can take to appeal the decision and potentially reverse it. Understanding why the claim was denied and knowing how to navigate the appeals process are key to ensuring you receive the coverage you need.
Denials Are Common
Health insurance claim denials are more common than many people realize. According to a report by the Kaiser Family Foundation (KFF), in 2020, about 18% of in-network claims were denied across HealthCare.gov marketplace plans. However, this rate can vary significantly depending on the insurer and the type of plan. The reasons for denial can range from coding errors to missing information or determinations that the treatment was not medically necessary.
Appeals Are Rare, but You have a Good Chance of Success
When it comes to overturning denied claims, the success rate depends on a number of factors, including the reason for denial and the thoroughness of the appeal. According to the same KFF report, only about 0.2% of denied claims were appealed by consumers, but 40% of those appeals were successful, resulting in the claim being paid.
Medicare claims
For people on Medicare, the situation can be a bit different. Medicare claims are denied less frequently, but denials still occur. Medicare offers multiple levels of appeal, and beneficiaries are generally more successful at overturning denied claims. The U.S. Government Accountability Office (GAO) reported that from 2014 to 2019, Medicare beneficiaries successfully appealed about 50% of denied claims that made it to the third level of the appeals process.
Overall, both private insurance and Medicare provide avenues to challenge denials, but the processes and success rates can differ based on the insurer and the nature of the coverage.
Learn more about Medicare Advantage Plans Denying Care.
Three Steps to Take When Your Medical Insurance Claim is Denied
Step 1: Review Your Denial Letter
Yes, the denial letter might be long and confusing, but you’ll want to read it carefully. It will tell you exactly why you were denied coverage. And, you need to know that in order to take the next step.
It may be an administrative mistake. Or, maybe you’ll need to submit more information. However, the letter may also make it clear that you’ll need to put together an appeal to justify that your doctor’s treatment is plan is, in fact, medically necessary.
Step 2: Consult Your Policy
It is highly likely that the insurer just got the situation wrong. Insurance companies make mistakes and you’ll want to compare your coverage to what the denial letter says.
Step 3: Call the Insurer’s Customer Service Line
No matter what you have discovered thus far, it can be useful to call your insurer’s customer service line. Ask questions. Explain your situation. And, you may be able to quickly resolve the situation.
Step 4: Write an Appeal
If you have not succeeded in overturning the denial, keep trying. Never take “no” as a final answer.
Not many people take the time to appeal, but you have a very good chance of getting at least partial approval or approval for a similar service.
To appeal, you’ll want to do some research. Review your denial letter again, it should outline how to appeal. If not, consult your insurer’s web site.
If you were denied on medical necessity grounds, you will want to make a compelling case for why you need the treatment. It is a good idea to involve your doctor. Ideally they will write up an argument for why you need the treatment. The more information they can provide, including test results, the better.
You may also want to compare why you were denied and understand the insurer’s decision-making criteria with national standards of care for your condition. To learn about these standards, you might do a web search for something like “guidelines for the treatment of [your condition].
Step 5: Send Your Appeal
Ideally you can submit your appeal online. However, some insurers require that appeals by sent via mail. If this is the case, you may want to send it by certified mail so you can track deliver.
Step 6: Escalate
Don’t despair if your appeal is denied. Your next step will be to request an external review in which a third party will assess the case.
Step 7: Get Help
There are experts in the claims process that can help. You may want to contact an organization like the Patient Advocate Foundation to see if they can provide any guidance on your case.
Make Health Care Planning an Important Part of Your Financial Plan
Planning for healthcare expenses is essential to a sound financial strategy because medical costs are one of the largest and most unpredictable expenses people face, especially as they age. Without proper planning, unexpected medical bills can strain finances, impact retirement savings, and limit access to necessary care. Healthcare costs, including insurance premiums, out-of-pocket expenses, and long-term care, are rising steadily, making it crucial to anticipate and prepare for these expenses in your financial plan.
Use the Boldin Retirement Planner to help you estimate these costs now, and for the rest of your life.
Including healthcare expenses in your financial planning ensures that you are better protected against potential financial shocks from illness, injury, or chronic conditions. By saving for healthcare costs through Health Savings Accounts (HSAs) or other tax-advantaged accounts, and accounting for insurance and potential long-term care needs, you can preserve your financial security and protect other key aspects of your financial future, such as your retirement and estate plans.