Financial Literacy Insurance
Denied insurance. What now?

When a health care claim is denied, you may feel like you've hit a dead end. Money is the last thing you want to deal with when you or someone in your family is sick, and now you've got to expend energy fighting for what you've been promised.

The reality is that denials of health care claims, even for named benefits, happen all the time. The denial isn't the last word; rather it's the beginning of the appeals process, the next stage in the game.

You are not alone, says Nancy Davenport-Ennis, president and CEO of Patient Advocate Foundation, a national nonprofit organization that serves as a liaison between a patient and his or her insurer.

"The more likely your illness is to be chronic, requiring routine and regular medical care, the more likely you are to face denials," she says. "If your diagnosis is for a very difficult, expensive illness, your (chance of) denial is increased -- if you are, say, a 34-year-old woman with stage-four breast cancer."

Of the cases the Patient Advocate Foundation oversees, 94 percent were initially denied benefits that were published benefits in the health plan. "Receiving a denial of benefits is not unusual, it is completely usual," says Davenport-Ennis. "Be confident that there is an appeals process and immediately begin it."

Facing denials  

There are three to four levels of appeals. The first is a simple appeal where you state your case in writing. In the second round, you send an improved letter with your doctor's improved letter.

At this point, if you can't understand exactly why your appeal was denied, call your provider and ask where in plan it shows that it's a denied benefit, Davenport-Ennis advises. "Absent that, you don't know what you're fighting," she says. Next is generally a three-party panel and after that, court.

You may find yourself entering the dispute process when you or your physician attempt to get pre-authorization approval for a health care service or after the fact, when you receive an explanation of benefits (EOB) form from your health plan saying that your claim for a service was denied. Whatever the case, do not accept a denial through a voicemail or a phone call. You need to get your denial in writing, Davenport-Ennis says.


Before making your first phone call to begin the appeals process, start a notebook to keep your appeals diary. Record the date, person you spoke with, the subject of that discussion, purpose of the call, and any promises made and when they are expected to be fulfilled. If a representative says something will be done in three days, make a note to follow up after three days.

The clock starts ticking on your appeal on the day that you receive your denial in writing. Most plans offer 30 to 60 days to appeal. Besides the notebook, you should also assemble a file containing any paperwork you have already accumulated, such as bills, your explanation of benefits, copies of your letters, information from your physician and physician referrals.

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