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Fighting health-insurance claim denials

One of these days, you might have to battle your health insurance company over a denial of coverage.

Of course, most people would rather skip the fight, and there are steps you can take to avoid health insurance denials before they occur.

And if that doesn't work, there are steps you can take to fight them once they do.

The key is organization -- having all your paperwork in order, taking detailed notes of your interactions with everyone in the process and understanding your coverage.

Knowledge -- your best weapon
Information is power, and this is never truer than when battling a health care system. The winner may be the side with the better-organized, more-detailed information.

Some experts feel that legislation is tilting the regulatory environment in the patients' favor.

"The environment is becoming more consumer friendly as more states and health plans adopt independent review processes," says Larry Gelb, president and CEO of CareCounsel LLC, a health care advocacy group.

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Even so, the best bet when dealing with insurers is to minimize the risk of denial, and then if one does come your way, to solve the problem in the early stages.

Here are some steps to help avoid denials of coverage by your health care provider before they occur.

  • Understand your policy thoroughly. Review it on a regular basis, and ensure that you know exactly what is covered and what isn't. If you have questions or don't understand any aspect of your coverage, call your insurance company and make them explain it in layman's terms. Make sure you understand the exclusions and limitations of the policy, and the section on how to appeal.

  • When receiving medical care, make sure your health care provider understands what is covered and what is not. Remember, doctors deal with many patients and many insurance companies. Don't assume they'll remember the particulars of your situation.

  • Take your policy provisions seriously. If it dictates that prior authorization is required, then don't receive care without obtaining that authorization. Assuming that the company will cover you and you can obtain coverage later, even if that is what your doctor tells you, could lead you into a world of bureaucratic hell, and might lead to a denial of coverage.

  • Keep detailed notes! This cannot be overstated. Take notes of every aspect of the process -- when you received authorization and from whom, the day you received treatment, what you discussed with your doctor, what action was taken and what follow-up is required. Every phone call made, person spoken to and action taken needs to be documented, including all names, dates and places.

  • Save copies of all paperwork from your doctor and your insurance company. Keep these records in chronological order for easy location.

  • If using an out-of-network provider, establish before care is provided that they will accept your health insurer's payment in full.

  • If there is a claim for which your insurance company will reimburse you only after you've paid your provider out of pocket, be sure to file the claim immediately.

  • If there is a delay in payment, call your insurance company immediately.

When prevention fails
Assuming you've taken all these steps and are still denied coverage, do the following:

  • Review all the paperwork regarding the case immediately, making sure you understand every aspect. Then, with your paperwork in front of you, call your insurance company. Use the customer service number.

  • The insurance company rep should be able to tell you why you were denied coverage. Make sure you take detailed notes of the conversation!

  • Denial of coverage is often a result of administrative error. If this is the case, you may be able to resolve it on the first call, or with just some minor communication thereafter.

  • Assuming the problem continues, request an itemized bill from the doctor or hospital, and analyze every charge. There are often charges on these bills for services not delivered. If you find any, notify the doctor or hospital immediately to get the bill adjusted. Then, notify your insurer.

Often, however, the denial has been legitimately issued. The insurance company may not consider your medical procedure necessary, may consider it experimental or outside their coverage area. That being the case, it's time to take additional steps.

  • Request a formal review by the insurance company. The customer service rep can tell you the specific procedures required. Then, state your case for appeal in writing, and send the letter via certified mail with return receipt requested. Make sure to do this immediately. Some companies have time limits on when appeal requests can be filed. Don't wait.

  • If the insurance company claims that the cost of your care was above their customary cost, request the doctor's or surgeon's notes. They may show that there were mitigating circumstances in your case that justify that cost. Also, request any other information you need from your doctor to prove your case, and make sure you have it all in writing.

State help is available
If you feel you're in over your head, if your appeal is denied or if your plan does not respond in a timely fashion, contact your state's department of insurance (in some states known as the department of managed care).

Every state has different ways of assisting consumers with health insurance appeals. The Kaiser Family Foundation provides information on every state's health care rules.

  • Certain states mandate certain types of coverage. Check the mandates for your state. The benefits you seek may be mandated, even if they are not dictated specifically in your policy.

  • Some states have an ombudsman who can provide detailed guidance through the process. Some have special offices for HMO issues. Some have only administrative assistance, taking the complaint and investigating. Your state's department of insurance will be able to tell you exactly how much assistance they can provide. Be sure to ask, and take advantage of all that is there.

  • If you have been denied coverage due to a perceived lack of medical necessity or because your insurance company considers your coverage experimental or investigational, most states now allow you to apply for an independent external review. Your state's department of insurance will be able to inform you if your state is one of these. This review will allow for an appeal of your case to an independent panel of physicians. While statistics vary by state, you have about a 50-50 chance that the review board will find in your favor.

There is one notable exception to many of the provisions stated here. If you work for a large employer, you may be covered by a self-funded plan in which the employer is actually paying your claims and merely using the insurance company for administrative purposes.

Your company's human resource department should be able to tell you if your plan is self-funded. Self-funded plans are not subject to state regulation. Therefore, if you need to appeal to a higher authority, you need to go to federal agencies, not state.

Contact the Department of Labor's Pension and Welfare Benefits Administration, and they will consider your appeal. Here, too, you have a chance of winning on appeal, especially if they find that the decision in your case was inconsistent with decisions made for other plan members.

-- Posted: Sept. 23, 2003

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