“The Department of Labor estimates that each year about 1.4 billion claims are filed with employer-based health plans… Of those, 100 million are initially denied.”  Source: “Fighting Denied Claims Requires Perseverance” New York Times, February 6, 2010

Receiving the news of denial of coverage of an insurance claim can be an enormous shock, especially if the claim is a large one.  However, you should never assume that “no means no” as far as your insurance coverage is concerned.

Appeals are successful in getting claims covered almost 50% of the time, so you should always determine why a claim was denied and follow the process to appeal.  Time is of the essence, however, since many insurance companies have a short period under which you can file an appeal.

The first step is to get as much information as possible about your contracted insurance coverage, your claim, and the denial.  This process may take some time and effort, but can be well worth it.

Items to have on hand:

  • Your Summary of Benefits – the document that details your coverage (paper or electronic link)
  • Itemized receipt or statement of services from your doctor or medical facility
  • Explanation of Benefits (EOB) from the insurance company
  • Your Insurance Card

Step 1.   Review your Summary of Benefits

Review My Patient Navigator “Understand Your Coverage” Roadmap

Confirm that the service/procedure is one that is covered under your plan.

Was prior authorization required under your plan and was it obtained?

If you are required to obtain authorization by your insurance company for a test or treatment and did not, then they have grounds to deny your claim.

You can still appeal the denial if there were extenuating circumstances, such as a medical emergency.

Do you have a co-pay or deductible to which your claim was applied?

For example, if you have a $20.00 co-pay and $1,000 deductible, and a bill for a $420 medical appointment, you will be responsible for paying the entire $420 to the provider.  $20 will be considered your co-pay, and $400 will be credited  toward your deductible.

Was the service provider in-network or out of network?

In-network providers usually have contracts with the insurance company that defines the amounts they are allowed to charge patients, and the insurance company usually covers that amount.   Depending on the providers’ contract with the insurance company, you should not be required to pay the difference between the allowable (covered) amount and the actual amount billed.  This usually appears in your bill or EOB as a write-off.

The rules of coverage for out-of-network providers vary widely among different insurance companies.  Just because a provider is out-of-network doesn’t necessarily mean that his/her services will not be covered to some degree.

For questions on these terms, review the My Patient Navigator “Glossary of Insurance Terms” Roadmap.

Step 2.   Review your Explanation of Benefits (EOB) form

Insurance companies are required to send one to you for each claim that is submitted.  If you have not received an EOB, call the Member Services number on the back of your insurance card and ask about it.  You may be able to access the form electronically through the insurance company’s web portal, or they may send you a copy through the mail.

The EOB will usually include:

  • Claim Number, Date Paid, Date Claim Received, Date Claim Processed
  • The provider name – doctor, hospital or other
  • Whether he or she is a preferred or out-of-network provider
  • The Type and Dates of Service
  • Submitted Charges – full amount that would be charged to a non-insured person
  • Plan Allowance – how much your plan is willing to pay for the contracted service
  • Remarks if applicable – usually with numeric codes explaining some aspect of how the claim was calculated
  • Deductible – the amount that you must pay toward meeting your annual deductible if it has not yet been met
  • Co-Insurance or Co-pay – the percent of the service that you are responsible for
  • Medicare or Other Insurance payment if applicable
  • What The Insurance Paid – final amount sent by insurance to the doctor
  • What You Owe the Provider – combination of Co-Pay (your per visit charge) and Co-Insurance (percent of the procedure you must pay)

Pay particular attention to the codes used by the insurance company in the Remarks section, which explain what was covered and why.  If the entire claim was denied, these codes will reveal (but not necessarily explain) the insurance company’s reason why.

If the denial comes from the provider it may be because there was an error in the information the provider submitted on the claim – perhaps a digit in your Social Security Number is wrong, or your name is misspelled, or your Date of Birth is wrong, or it was submitted to an old insurer in error, or your primary insurer was not billed firs.

Step 3. Call Member Services

There is a toll-free number listed on the back of your insurance card.  Tell the Service Representative that you have a discrepancy between a claim filed and the amount paid/covered, and you wish to understand why the claim was denied.  The representative will access your information and should be able explain why the denial was made.  Always get the name of the person to whom you are talking, and record the date and time of the discussion.

The reason for denial may be something easy to fix, such as the claim was filed with an improper or outdated billing code, or it may be more complicated.

  • If it is a coding issue, ask the representative for the correct code(s), call your doctor’s billing office and communicate the correct code(s).  The billing office then should re-submit the claim with the correct coding.
  • If you submitted the claim yourself (as would be the case for an out-of-network provider), you can request a new receipt/statement of services from your doctor’s office, then complete a new claim form with the correct coding and send it all to the insurance company.
  • If the service representative says that the claim was denied because you appear to have gone to an out-of-network provider, when you believe that you saw an in-network provider, make sure that the correct doctor’s name is on the claim that was submitted. Occasionally, a large group practice or hospital may have some providers that are included under a contract with an insurance company while others are not.
  • If the service representative indicates that the claim was denied because additional information is needed to justify the procedure, ask what specific documentation is needed, and from what source. Call the doctor’s office or medical facility immediately to begin the process of obtaining that necessary information. Many facilities charge a fee to copy medical records, so be prepared to pay that charge, if necessary.

Step 4.  Appeals

When it appears that a denial was not justified, then an appeal should be filed.

Every EOB has the Appeals Procedures detailed on the back of the form.

Alternatively, you can usually access this information on the company’s website or by speaking to a Member Service Representative.

Navigator Tip:

If you are speaking with a Member Service Representative about the possibility of appealing, do not say that you want to appeal.

That statement may be taken as the appeal itself and start the clock ticking.  Make it clear that you are not starting the appeals process at that time.  You need to take the time to gather the necessary information and present it to the insurance company in an optimum manner.

Make sure you know what your deadline to appeal is – usually 60, 90 or 180 days after you are notified of the denial of benefits.

Follow the insurance company’s rules for appealing; understand your basis for the appeal.

Customize your appeal to argue specifically against the reason for the denial of your claim.

These are some common reasons for appeal:

Medical Emergency

Procedure/medication tried after all others failed

Out-of-Network provider only one available within reasonable distance

Out-of-Network provider only one skilled at particular procedure

Test necessary because all others were inconclusive

In preparing your appeal, you must gather all possible data that will demonstrate why your appeal is justified.

  • Obtain all relevant medical records.
  • Obtain letter(s) from your doctor in support of the procedure/treatment, explaining why it was necessary.
  • If appropriate, you can obtain abstracts from medical journals showing why a certain treatment was appropriate and safe.
  • Try to obtain proof that other insurers are covering the procedure or treatment.
  • Document unusual aspects of your case that warrant the exception requested.

When writing an appeal letter, write a clear statement of the reason the claim should not be denied, your support of that reason and the action you wish the insurer to take. It is essential to write a strong, factual and unemotional letter and to include documentation.

Make sure to include:

Your name

Insurance ID number

Claim Number(s) shown on EOB

Services provided

Date(s) of services provided

Amount of the Charge(s)

Reason for denial of claim

Your reason why denial of claim was inappropriate, and documentation supporting your reasoning

Request for a specific resolution, i.e full coverage of claim within 30 days

Enclose:  Copies of EOB, relevant pages of Summary of Benefits, Letters from Doctor(s), Medical records, Test Results and other relevant documentation

Make sure to send your letter via certified mail, with a signature receipt requested.  Verify the address to which is needs to be sent, as the appeals address is usually different from the normal claims address.

If you are asked to send your documentation by fax, make sure to follow-up by phone to ensure that it was received and logged.

Note:  Your Patient Navigator can undertake this time-consuming process for you.  We have experience and success winning appeals.  Ask your navigator for more details about our insurance reconciliation services.

Step 5. Do Not Give Up

Sometimes a second or third level appeal is necessary.  You still have options, depending on the type of insurance you have.  A re-submission of your appeal with additional documentation can be successful where the first may have failed.  Go to the next level when necessary!

You also have the option to take up the matter with your state’s independent external review board, after all internal appeals have been exhausted.

Your Patient Navigator can provide further guidance on options available to you if the initial appeals process has failed.   Contact our office for help.

See also:

“Understand Your Insurance Coverage”

“Filing an Insurance Claim Step by Step”

“Glossary of Important Insurance Terms”

Links to Research Justifications of Medical Necessity

PubMed (NIH)

Public Library of Science (PLoS) Journals

New England Journal of Medicine

Journal of the American Medical Association

Annals of Internal Medicine

National Institutes of Health

National Guideline Clearinghouse (make sure the guidelines are current, less than five years old)

Drugs@FDA (a catalog of FDA-approved drug products)

Medline Plus Drug Information

United States Pharmacopeia-Drug Information

The American Hospital Formulary Service Drug Information (your doctor or pharmacist may have a subscription to this resource)

DRUGDEX Information System (your doctor or pharmacist may have a subscription)

Patient organizations for specific disease/disorder (link to Finding Resources roadmap)

Other Links:

A Consumer Guide to Handling Disputes with Your Private or Employer Health Plan (includes a State by State guide to external review processes)

Medicare Rights Center - 800-333-4114

Patient Advocate Foundation – 800-532-5274