How to Fight a Health Insurance Claim Denial
We’ve previously discussed some of the many reasons insurance companies give for turning down claims (see Why Some Health Insurance Claims Are Denied, posted September 2, 2022). Maybe the insurer said the treatment is experimental or investigational or not medically necessary, or that the procedure is excluded from the plan. Insurance companies are often wrong when they make these determinations, but how do you go about convincing them of their mistake? You have a right under state and federal law to appeal a health insurance claim denial, but you must follow certain steps in a certain order under defined time frames. We talk about those steps below.
Is Your Policy Covered by ERISA?
The first step in figuring out how to appeal a claim denial lies in determining whether your insurance policy is governed by ERISA or not. ERISA is a federal law that regulates most employer-sponsored health plans. If your health insurance is purchased through your employer, it is likely covered by ERISA. Exceptions include if your employer is a church or government entity, or if the plan includes a public subsidy such as Medicare or Medicaid. If you bought your health insurance privately and not as part of a group health plan, then it is likely not covered by ERISA.
Appeals Process for Denial
If you have a non-ERISA plan, you could theoretically go straight to filing a lawsuit against the insurance company if you can’t resolve their claim denial informally, although you might want to try appealing through the company’s internal procedures first. Holders of ERISA plans must follow these internal steps first, and ERISA requires insurance companies to have an administrative review procedure in place for claim denials.
Under ERISA, the insurer must provide you with a written explanation for the denial. By law, that explanation must come within 30 days of the date the treatment was provided. If you haven’t yet had the treatment but are seeking prior authorization, they must inform you of the reason for the rejection within 15 days of the requested procedure. If the matter is urgent, they must respond within 72 hours.
Once notified that your claim is denied, you have six months (180 days) to file your internal appeal with the insurer. The insurance company will have directions on how to do this, including any forms they require. It’s a good idea at this stage to get with an insurance lawyer to complete the forms or write a notification letter and provide any additional information that could help your case. Your goal is to get the matter resolved favorably and as quickly as possible, and having experienced legal counsel can help you get there.
The insurance company must complete the appeal process within 60 days if you have already received the service, or within 30 days if you have not received the service yet. Depending on your state law and the terms of the policy, there might be one or two levels of appeal to go through, plus an additional appeal to a medical board or some other independent body. If your claim hasn’t been resolved favorably by that point, then it’s time to consider whether to file a lawsuit. If you believe the insurance company is in the wrong and you have the law and facts on your side to prove it, then litigation might be needed to provoke a settlement or take the case to judgment.
Get a Lawyer and Protect Your Rights
The insurance company is required to tell you how to appeal your denial, but they don’t always do what they are supposed to. Some companies have been known to act like a customer’s complaint is merely an “inquiry” that doesn’t trigger their obligation to inform the policyholder of their right to appeal, and it has taken litigation to straighten them out. In any event, meeting the deadlines baked into the law is critical to protecting your rights, so don’t delay in pursuing your appeal after a claim denial, and don’t hesitate to call a lawyer for guidance and professional advocacy in this challenging area.