Private Health Care Coverage

What if My Application for Private Health Care Coverage is Denied or My Benefits Request is Denied?

First Steps
Ask for Help
Call Customer Service at Your Health Insurance Provider
File a Formal Internal Appeal
File a Formal External Appeal
Expedited Review: This is Urgent!
File a Lawsuit
Other

First Steps

When an application for private health care coverage is denied, it usually means the company has decided that the risk of providing benefits is more than the value of the premium it would receive. You're entitled to know why your application was denied. To the extent the denial was based on faulty information, or a misinterpretation of medical records, providing more accurate or up-to-date information could cause the company to change its mind.

A claim for medical services can be denied for any number of reasons:

• The medical service is not covered under the health plan.
• The provider is not a member of the health plan.
• The proper preauthorization was not obtained.
• The service is determined to be not “medically necessary.”

You may be denied payment for medical services before or after you use the service. Of course, it's better to realize there’s a problem before you use the service.

There are actions you can take when you disagree with a decision reached by the health care coverage provider once you've asked for pre-authorization or reimbursement for expenses.

Return to top

Ask for help

Start by asking for help from your physician’s office. Make sure your primary care physician is aware of the problem you are having. Ask someone from his or her office to call the insurance company to help you resolve it. Physician office billing staff deal with health insurance problems every day, and they may be able to get you a quick answer.

If you get insurance through your employer, people in your personnel department may be able to help you. They also answer health insurance questions in their daily jobs.

Whether you get help from your physician office or your personnel department, explain your situation and why you disagree with your insurance company’s decision. Make sure they have all the information they need. Don’t simply hand the problem over. Work with whoever is helping you to resolve the problem.

Return to top

Call customer service at your health insurance provider

You can also call customer service at your health insurance company. The phone number should be in your health insurance policy or, if you are insured through your employer, you may also get it from your personnel department.

Do your homework before you make this call. Whether something is covered depends on what your policy or health plan says in writing. If you are calling your employer’s health insurance provider, have in front of you your Summary Plan Description..

Whatever the disagreement, be able to refer to what’s in your policy or health plan and, based on this, why you disagree with your health insurance provider. Also, make sure you have all the information you need from your physician’s office to support your statements.

Calmly present reasons why you think something should be covered, pointing to what in your policy or health plan supports your arguments.

If customer service representatives say they will look into the problem, ask them when they will get back to you. Ask them for their name and extension. Keep detailed notes of calls, and call back if they don’t get back to you when they said they would. When you call back, try to get the same person.

Return to top

File a formal internal appeal

If you can’t resolve the disagreement through the steps above, you may decide to take more formal actions. The first formal action would be to file an internal appeal or internal review with your insurance company.

Review your insurance Summary Plan Description for how to file an internal appeal. If it is not clear on this, call customer service at your insurance company and ask how to file a formal internal appeal or internal review. Although you may be able to initiate an internal review by phone, you must file it in writing, according to the process set forth by your insurance company. This may be through sending a letter with specific information or through filling out a form from your insurance company.

You will have to provide certain information in this letter or form, which will likely include the following:

• The treatment you think should be covered.
• Why you think it should be covered, including references in your policy that support your argument.
• Recommendations and referrals from your doctor supporting why the treatment should be covered.

Make sure you know the time frame requirements for an internal appeal. These include deadlines for you to file an appeal and for the insurance company to respond. These should be spelled out in information from your insurance company, or you can get them by calling customer service.

Federal law spells out the time frames for internal appeals that health insurance plans under ERISA have to follow. Ask your personnel department if your employer’s health insurance is under ERISA. For insurance under ERISA, you have 180 days from the date of treatment to file an appeal. The insurance company has 30 days to respond to your appeal if the medical service denied payment has not yet been provided, and 60 days if it has already been provided. (See “Expedited review” below, if your medical need is urgent and you need a quicker response.) ERISA requires that there can’t be more than two levels of review. Furthermore, if there are two levels, they have to still be completed within the times frames described above.

Your insurance company may have a couple of levels of internal review. For example, if you don’t agree with the initial decision, your appeal may go to a panel of people not involved in the initial decision. Or, your insurance company may offer arbitration, where an independent person reviews the information and makes a decision. Some insurance companies may require mandatory arbitration as a step in the grievance process. Some insurance companies also have a clause in their plan that states that, by agreeing to arbitration, you are waiving your rights to other future legal actions, such as the right to file a lawsuit. Ask your insurance company about this, and don’t proceed until you are comfortable.

For insurance plans not under ERISA, individual states may establish time frames and other requirements for internal reviews. Your state's Insurance Commissioner's office may have a consumer protection division that accepts complaints.

Make sure that in the form or letter you send you show why you think the denial was improper. Put it all in writing, even if that means adding extra pages. Attach any supporting information, such as copies of documents from your doctor’s office, the hospital, and pages from the insurance Summary Plan Description or policy. Ask your physician’s office if your physician would provide a letter supporting your argument for coverage that was denied.

Also add the following statement to what you submit: “By filing a grievance, I am not waiving any legal rights against the insurance company, including my right to file an action in a court of law.” You should do this to try to keep open the option of going to court, should you choose to do this later.

Return to top

File a formal external appeal

If you can’t resolve the disagreement through an internal appeal to your insurance company, most states provide for an external review process. This is a process external or outside of your insurance company. The external review is conducted by a state agency, such as the state department of insurance, or by an independent review organization under contract to the state. States that have external review processes each have different requirements for what types of disputes it will review and the procedures it uses.

In states that have external review, this option is available to you if you are under an individually purchased plan or an “insured” ERISA plan. (An insured ERISA plan is one that that is not self-funded by the employer.) State external review is not available to you, however, if you are under a self-funded ERISA plan. Ask your personnel department whether you are under an insured or self-funded ERISA plan. Ask your personnel department or your state department of insurance whether state external review is available to you and, if so, how to initiate it. If your state does not have an external review process, or if it is not available to you because you are under a self-insured ERISA plan, ask your state department of insurance what your next options for appeal are. In this case, your next option may be to file a personal lawsuit against the insurance company.

If state external review is available to you, the process you follow may differ between states. In some states you may initiate an external review through your health insurance company. In others, it may be through the state department of insurance or other state agency. Make sure you know your state’s time frame requirements for filing an external appeal and for receiving a decision. Many states require that you go through your insurance company’s internal review process before you can file for an external review.

In most states that have external review, there is no fee to you for the service. In some states there is a nominal fee of around $25 to $50.

Follow closely the instructions for filing an external appeal. They may ask to fill out a form or write a letter. You will provide information similar to what you would have provided in your internal appeal. Just as in an internal appeal, explain in writing why you think you were wrongly denied coverage of a medical service. Attach copies of any supporting documents and letters.

Ask your state department of insurance what your options are if the external review rules against you and you still believe the procedure should have been covered. Ask if there is a second level of appeal within the external review process. If not, your next option would be to file a lawsuit.

Return to top

Expedited review: This is urgent!

You can’t wait 30 days for a decision when your medical need is urgent. You need the procedure now, and you disagree with your insurance company’s decision that it is not covered.

In this case, if you can’t resolve it immediately through calling customer service or meeting with your personnel department, then file an internal appeal as described above and make it clear that your medical need is urgent and that you require an “expedited review.” Plans under ERISA must respond to urgent appeals within 72 hours. For non-ERISA plans, ask your insurance company what its time frame is for emergency appeals.

At the same time, in states that have an external review process, call your state insurance department and ask if you can file for an emergency external review. If this is allowed, and if your internal appeal ends up being unsuccessful, you will have already begun an external review. In this way you’ve lost less time. In most states that have an external review process, an expedited review usually takes 24-72 hours. To file an emergency appeal or review, your physician may have to certify in writing that your need is urgent.

Expedited review is usually for disputes before treatment is provided. Internal and external expedited reviews are usually conducted when there is a medical emergency – care is urgently needed but payment has been denied. But what about when you are denied payment for care already provided? You’ve already received the care, but the insurance company is denying payment for it. In this case, you may ask for an expedited internal or external review. But you may receive a normal review with its longer time frames because it is not a medical emergency. In any case, let the hospital and other providers know that you are appealing your insurance company’s decision. Let them know when you expect a decision on your appeal. This will help them understand why you have not sent them payment.

Return to top

File a lawsuit

If other steps are unsuccessful, you may decide to hire a lawyer and file a lawsuit against the insurer. You should find a lawyer who has knowledge about health insurance law and experience in these kinds of cases. If you are financially unable to hire a lawyer, you may be able to find free or reduced-cost legal services in your community. Also, lawyers often take these types of cases on a contingency basis, where they are paid only if they win, receiving a percentage of what the jury awards.

Plans that are subject to ERISA are regulated by federal law, and because damages you can receive for wrongful denials of claims are limited, lawyers may be reluctant to take these cases on a contingency basis. Litigation against non-ERISA plans offer broader remedies.

Return to top

Other

File a complaint with state insurance department

You may want to file a complaint with your state insurance department. Call your state insurance department to ask them how to do this.