February 23, 2009

Dealing with health insurance denials.

A few years back I went to the emergency room for something that really didn't require emergency treatment. I have to admit that I panicked at the sight of my own blood. It was a little embarrassing after the fact. I was even more annoyed with myself after the insurance company denied the claim and I had to pay the bill myself. You see my insurance at the time didn't cover emergency room visits that they didn't deem an actual emergency and honestly this visit wasn't one.

It is certainly possible that you too could get denied by your insurance company for an insurance claim. It was a little bit tough to find solid data on the rates of claim denial. I found this reference that said that "final coverage denial rate for physician recommendations within eight categories of care was at most 3 percent and much less for most categories of care".

Denials can be made for a variety of reasons. Sometimes denials are simply the result of clerical errors.
It seems that it is more common for them to rely on paperwork and to not be computerized and forms change multiple hands so I feel the healthcare system is prone to clerical error. Denials can be due to rules or policies. Maybe you didn't fill out a form correctly or the doctor missed a step. If you attempt to get insurance that is explicitly not covered then you'll be denied. Certain procedures may be viewed as medically unnecessary. These are a matter of debate between the doctors and maybe your doctor thinks something is needed and the insurance company doctor disagrees. There are also cases of denials with no specified reason. Lastly it is possible that the denial is simply a matter of the insurance company just trying to save themselves the money, and in this case they generally give a bogus reason.

Before you get treatment there are 2 key things I'd do to try and avoid denials :

1. Know your policy: Ideally you should consult your insurance policy information before you get treatment so that you know what they do and do not cover. Pay special attention to rules about seeing specialists, visiting the emergency room and know the limits on your treatment. For example if your policy says they only cover 20 chiropractor visits a year then going over that limit will be denied. Or if you have to talk to your primary physician first before visiting a specialist then make sure to do so. If you're ill or injured then its hard to sit down and read all the small print in your insurance plan, so it is best to do this before you actually need treatment so you'll be familiar with the plan in advance.

2. Verify coverage first: If you need expensive treatment then try and get confirmation from the insurance company before treatment is started. Ask your first doctor to confirm if they know the treatment is covered or not.

Unless the policy explicitly states the treatment wasn't covered then you should pursue challenging the denial.

Here are two guides to dealing with a denied health insurance claim:

Appealing a denied medical insurance claim: 10 steps from Bankrate When Your Insurance Company Wont Pay: 12 Tips from About.com. These guides discuss everything from initially challenging the denial, getting paperwork in order, appealing with the insurance company and then maybe even going to your state department of insurance or a lawyer.

Healthcare can be very expensive and getting a claim denied could cost you a lot. Its a good idea to take the time to learn about your policy in advance so you can try and avoid getting uncovered services. If you are denied through no fault of yours then it is well worth your while to pursue challenge of the denial.


Further references :

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