HEALTH INSURANCE:
What to Do if a Health Insurance Company Denies Your Claim

A major illness or a stay in the hospital can be stressful. It's not a time you want to be worried about your insurance coverage. However, for some insurance consumers, this is when they are hit with a denial – notification their insurance company won't pay all or part of a claim. To help understand your course of action when a claim is denied, the National Association of Insurance Commissioners (NAIC) offers these tips.

Read and Understand Your Policy
It is imperative that you read your policy thoroughly to understand your rights and responsibilities. The Affordable Care Act (ACA) mandates that group health plans and health insurance issuers offering group or individual coverage must provide a Summary of Benefits and Coverage (SBC) and glossary of commonly used terms before consumers enroll in a plan and at renewal time to help consumers understand their policies. If any part of the policy is unclear to you, contact your insurance provider for additional clarification.

Your policy should indicate the procedures to follow to appeal a claims denial. There are typically two levels of appeal required: a first-level internal appeal administered by the insurance company; and a second-level external review administered by an independent third-party. Your state insurance department will be able to explain the appeals process further if you have any questions.

What to Do If Your Claim is Denied
If you receive notice from your insurer that your claim was denied, make a list of questions you have about the claims denial and start gathering important documents, such as your policy, the SBC, and the denial letter. Once you are prepared, contact your insurance company. You will find contact information on the back of your insurance card and the denial notice, which will also contain instructions for appealing the denial.

In some cases, a simple error could be why your claim was denied. Your provider's billing staff may have entered an incorrect code when your claim was filed with the insurance carrier, or your claim may have inadvertently been sent to the wrong insurance company. This type of error can usually be cleared up quickly with a single phone call.

Keep notes of all conversations you have with company representatives. Include in your notes the name of the person with whom you speak, as well as the date and time of the conversation. Ask for the person's phone extension so you can contact them directly the next time you call. Listen carefully and make note of the answers given to you.

What to Do If Your Insurer Continues to Deny Your Claim
If your claims denial is more complex than a simple error and your insurance provider still refuses to pay the claim, be persistent. Insurers are obligated to pay claims in a timely manner and in accordance with the wording in their policies; however, you may experience delays or more denials.

The usual procedure for appealing a claim denial involves submitting a letter to the insurance company requesting that your claim be reconsidered and giving specific reasons why you believe your claim should be paid. When composing your letter, be as detailed as possible; explain why your procedure or medication is necessary and should be paid for under your insurance policy. With your letter, include evidence that supports your claim, such as medical records, x-rays, lab results, or a letter from your physician that explains why the treatment is medically necessary. If you or your doctor feels that the denial of your claim could be life-threatening, you can ask that your appeal be expedited. Keep a copy of everything you send to the insurance company for your records.

The ACA requires that your insurance provider makes its decision regarding your internal appeal within the following timelines after receiving your request:

  • 72 hours if you're appealing the denial of a claim for urgent care.
  • 30 days for treatment that you haven't received yet.
  • 60 days for treatment you have already received.

In response to your letter, your insurance company will indicate the next steps in the process, as well as the timeframe for any additional follow-up or appeals. They may also request additional information from you and/or your medical providers.

You may contact your state insurance department for assistance appealing your claim at any time.

More Information
Make sure you check with your state insurance department about laws regarding health insurance claims. For more information about health, home, life and auto insurance options, and tips for choosing the coverage that is right for you and your family, go to www.insureUonline.org.

July 2014

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The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For consumer information, visit insureUonline.org.


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