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By Kathy Steligo
When we’re healthy, having problems with our insurance is the furthest thought from our minds. We go about our lives, trusting that as long as we pay our premiums, our medical care will be there when we need it. But that’s not always the case. All too often, clear answers—and payments—don’t come easily.
Health insurance is a complex business, where the focus is often on the bottom line. It’s in your best interests to choose the best plan you can afford, and to clearly understand its exclusions and limitations before you join. Still, many people experience denials for requested health services, never realizing their coverage doesn’t include a particular treatment or medication until they actually need it.
The Best Way to Avoid Denials
When you sign on the dotted line to buy health insurance, you agree to abide by the policy’s rules, including which doctors or specialists you may see, where you may be treated, and which procedures or prescriptions are covered. It’s not always possible to prevent a claim denial, but you can do a lot to reduce the likelihood of receiving one. Understand your plan’s rules—what’s covered and what’s not—and you’ll have a better chance of avoiding nasty little payment surprises.
Start by taking the time to read your policy or Summary of Plan Description (SPD), including the fine print. Be sure your plan doesn’t specifically exclude the type of care or service you are requesting. Do you need a referral from your primary physician? May you receive treatment at any clinic or hospital, or only those facilities approved by your insurance company? Is your prescribed medication included on the plan’s formulary of approved drugs? If a segment of your plan is unclear, ask your insurer for an explanation. Be sure you know the limitations of your policy: learn whether an annual or lifetime cap is applied to prescriptions or other benefits, and how much, if any, you’re required to pay-out-of pocket and under what circumstances.
One very important rule of thumb: Never assume your insurance will pay for a particular benefit. Your life will be a lot easier if you follow your plan’s rules for preauthorization, instead of trying to obtain coverage after the fact. Always ask your physician if the chemotherapy, radiation, or other breast cancer care he recommends is, in fact, covered by your health plan. If your policy requires prior authorization, get it in writing before you proceed with a procedure. This is especially important if you see an out-of-network provider, who will bill you for the balance of payment if your insurance decides the total charges exceed what is “usual and customary,” and pays only a portion of the bill. Physicians will also hold you responsible for the entire payment if they do not accept your particular health coverage.
When your primary care physician refers you to other health care providers, always get a written referral. Ask for a prescription before you buy a wig during chemotherapy or a post-mastectomy prosthesis, for example. If your health policy requires you to have a referral before you see a massage therapist for lymphedema or consult with a bone marrow specialist, be sure you have the document before you go to your appointment. That piece of paper can make the difference between a claim that is paid and a claim that is denied.
When you file a claim, do so promptly, and follow the steps required by your insurer. Include all necessary documentation and information, and forward the claim within the time period specified.
Dealing with Denials
Unfortunately, even playing by your health plan’s rules doesn’t guarantee a denial-free relationship with your insurance. Receiving a letter full of confusing terms that denies your benefits is frustrating, disappointing and can be intimidating. Maybe that’s why so many people give up at that point and simply pay their own medicals bills. But don’t automatically surrender and pay the bill yourself, because claim rejections are frequently reversed.
Patient claims are denied for many different reasons, and billing errors are among the most common. Your carrier may reject a claim that includes an incorrect code (billing for a procedure that wasn’t authorized) or erroneous fee (the hospital billed your insurer for medications your doctor didn’t order or you didn’t receive). Contact the billing office where the service was performed, request an itemized accounting, verify the correct information, and notify your insurance company of any errors. Frequently, a simple phone call with the correct information is all that’s needed to approve the claim.
Medical plans are not all-inclusive; they don’t cover every treatment and procedure in all circumstances. Your claim can be rejected due to limitations in your policy—services that are not covered, health costs that exceed your health plan maximum, or claims filed (or appealed) after the time period allowed. Denials may also be issued when a provider considers the benefit “medically unnecessary.” If this happens, review your SPD to see how that term is defined, then ask your physician to write a supportive letter stating why the treatment was essential for your health and how it meets your insurer’s criteria of medical necessity.
The denial letter, usually an Explanation of Benefits, should explain why your request for payment wasn’t honored. If it’s unclear, call your health insurer immediately and ask for an explanation. Request a written copy of the specific wording in the SPD or policy that denies your claim.
When you contact your health company regarding a denial, remember that the first point of communication, the customer service representatives, are there only to answer general questions. They’re typically not empowered to fix problems or overturn decisions. So unless your claim was denied because of an easily-identified clerical error, escalate your claim to a case manager, who will act as a liaison between you and your health insurance company. If you’re unsatisfied with that interaction, don’t be afraid to escalate your issue to a medical director, a vice president or even the CEO of the company. It may be difficult to actually reach them, but be persistent and keep trying until you get the audience you need to hear your side of the story.
The Right Way to File an Appeal
The goal of an appeal is to convince your health carrier to reverse its denial and pay for your services. Because health insurance companies design their own appeal processes, fighting for the care you believe you’re entitled to can be lengthy and frustrating. Is it worth it? Only you can answer that. But if you believe your policy entitles you to a benefit for which you were unfairly denied, you don’t have to accept the reason for denial, but you must understand it to logically provide evidence to the contrary.
Keep impeccable records. Document everything related to your health care: why you sought treatment, health professionals with whom you met, and instructions or treatments you received. Keep all related paperwork and receipts. Document conversations with medical care providers and insurance company representatives, including the name and contact information of the people you speak with, the date of your conversation, and what you’re told. All this may seem to be a tedious effort, but the information will come in handy if your claim is denied and you need to file an appeal.
Get help. Your doctor is your best ally. Ask him to write a letter describing your condition, the treatment he recommended for you, why it is medically necessary, and what your prognosis will be with and without it. Ask him to include peer-reviewed research regarding your condition or your treatment. Your physicians’ billing coordinators should be quite experienced dealing with insurance companies; they can help you get preauthorization and provide valuable appeal information. Myriad Genetics, for example, will help you file an appeal if your claim for genetic testing is denied. If your insurer refused your request for a particular type of reconstruction after mastectomy, get your plastic surgeon’s office involved.
File your appeal promptly. Your SPD should identify the timeframe allowed to file your appeal, usually within 180 days of the denial. If your request is medically urgent—your doctor recommends not delaying surgery or other treatment, for example—file an urgent care claim, which is often reviewed within 72 hours (check your SPD for your policy’s turnaround time for an urgent care claim).
Do it right. Follow the complaint or appeal process described in the SPD to the letter. Carefully write a letter explaining your position, or if your policy provides an appeal form, fill it out completely and keep a copy for yourself. The SPD should explain when you can expect a response (employer-provided plans must respond to appeals for prospective services within 30 days, and respond in 60 days for services already rendered).
How to Write an Appeal Letter
1. Include your name, address, daytime telephone number, your insurance plan number or group code, member identification number, and the claim number assigned to your case.
2. Explain your condition or illness, the treatment you are requesting, and why it was denied. Also include the name, address, and telephone number for the physician or health care provider. Attach a copy of the bill if you’re filing for reimbursement.
3. State why you believe the denial should be reversed. Correct any errors or misconceptions on which the denial was based. Refer to specific sections of your policy or SPD that apply to your particular circumstances and support your position.
4. State why you believe the denial should be reversed. Correct any errors or misconceptions on which the denial was based. Refer to specific sections of your policy or SPD that apply to your particular circumstances and support your position.
5. Specifically request that the denial be rescinded and your request for coverage be granted.
6. Send your letter via certified mail with a return receipt requested to the appeals address in your SPD.
Be aggressive, be consistent, be persistent. Use every tool at your disposal. If your initial appeal fails, contact The Patient Advocate Foundation (www.patientadvocate.org), enlist the help of your employer’s benefits administrator, state health commissioner, local consumer help group, and U.S. senator or representative.
If your appeals are exhausted and the denial is upheld, you can request an independent external review from your state’s health ombudsman or department of managed care. Visit www.kff.org/consumerguide/7350.cfm to find details of your state’s external review process. If you’re covered by your employer’s self-funded plan, which is not subject to state regulations, appeal at the federal level: contact the Department of Labor’s Pension and Welfare Benefits Administration.
Should you get help from a lawyer? If you’re convinced you’re right and your health insurance company is wrong, consult a lawyer who specializes in health care to determine whether your plan’s denial is legal. At the very least, and in cases where substantial expense is involved, consider having a lawyer draft a formal letter stating why you believe you’re entitled to the benefit in question, and citing state or federal laws that support your request, and denials of similar requests that have been subsequently reversed.