Common Reasons for Claim Denials
You’ve received an Explanation of Benefits (EOB) and you notice that your insurer will not cover all or parts of the expenses from medical care you received. Don’t panic. First read the remarks and notes on your EOB to see the explanation for the denial. If you still have questions, call your insurer’s customer service number to get more details about the denial.
Denials usually fall into two categories:
- Technicalities: missing codes or authorizations, claim filing mistakes
- Medical: treatment not considered a medical necessity or is considered experimental/investigational.
Read the insurance communication carefully. Sometimes what you consider a denial is not really a denial. There is a difference between a denied claim and a rejected claim. For example, the problem may simply be a rejection of the submission because information is missing. A simple clerical error or missing document can often be cleared up relatively quickly and easily. It’s usually the provider’s responsibility to resolve the issue but you’ll likely need to follow up to make sure it’s done.
Other reasons for denial may require more extensive investigation and additional information. Going through the arthritis care checklist before getting care may help to prevent or minimize denials.
Most issues will fall into one or more of the following categories:
- Process Errors
- Services Not Appropriate or Authorized
The claim was not filed in a timely manner. If the provider or facility is in-network, ask the billing department to provide proof of the submission date. If they didn’t submit in a timely manner, you are not responsible for their error but may need to keep following up until the situation is resolved.
Failure to respond to communication. If you receive any communication from your insurer with a specific request for information and you fail to respond, the insurer may deny the claim. If you forgot or aren’t sure what to do, contact the insurer. They may allow you to submit the information after the deadline and then pay the claim. However, read your insurance booklet carefully as the insurer may include language that allows them to deny a claim if requested information is not received in a timely manner.
Policy cancelled for lack of premium payment. If you’ve missed a couple of payments and didn’t realize, call and write the customer service department of your insurer with a detailed explanation of the reasons. Maybe there was as a payroll error or you changed bank accounts and forgot to notify the insurer or adjust your automatic online bill-pay settings. Make the case that you have been a long-standing customer with a good payment history. Ask for a one-time exception and that your coverage is restored.
Make sure you understand your coverage, summary of benefits and the deductibles. Often there will be in-network deductibles and out-of-network deductibles that you and your family have to meet. So if you have satisfied your in-network deductible, but decide to get care from an out-of-network provider, you’ll have to satisfy another deductible.
Out-of-network provider. If you have certain plan types (HMO or EPO), you may not have coverage for out-of-network (OON) providers, except if it’s an emergency. Otherwise, you’ll need to make the case that the OON provider is critical for your care before seeking treatment. You could also show there was an unreasonably long wait time for an in-network provider. In both situations, you should try to get the plan to preauthorize your use of an out-of-network provider and make an agreement about payment rates in advance. In some instances, for example, if there is no suitable local in-network provider, you may win an appeal that requires your plan to reimburse the medical service(s) at an in-network rate. Other plan types (PPO and POS) will cover non-preferred providers, but you’ll pay more.
Notify your in-network health care providers that they can only use third party providers in your network (e.g., labs, imaging center, infusion center, pain clinic.). It’s a good idea to have a statement signed by an appropriate member of the provider’s staff in your file and send a copy to your insurer. You don’t want to be surprised with an out-of-network bill from an anesthesiologist, radiologist or pain specialist that you or your in-network provider assumed was also in-network.
You are not eligible for the benefit requested. All insurance plans have certain services and procedures that are excluded – cosmetic surgery, for example. If the service you received is not listed under plan exclusions, ask your insurer for more details on the denial. Depending on the reasoning – not medically necessary, lacking preauthorization, incorrect diagnosis or procedure code, etc. – you may be able to appeal the denial.
Service was not preauthorized. Imaging scans like MRIs and some procedures may require preauthorization, which your doctor’s office should request on your behalf. Sometimes the facility will not proceed with the service if you don’t have pre-authorization. In other cases, your claim might be denied after the fact. If your claim was denied but your doctor ordered the tests, ask your doctor to write a letter to your insurer, confirming that it was medically necessary, to accompany your appeal. It’s also important to understand that even though you received prior authorization, the insurance company can still deny payment of the claim if you use an out-of-network provider or you exceed your plan limits for the test or procedure.
Medication not covered. Sometimes a medicine your doctor prescribes is not on your plan’s formulary, is on a specialty tier, is deemed investigational for your condition, or requires you to try another drug first (step therapy). Your doctor can help you appeal in different ways:
- Request that an exception is made due to medical necessity and show proof from peer-reviewed medical journals that the medication in question is effective for your condition.
- Request that step therapy rules be waived.
- Provide proof that you have already “failed” on the lower-tier drugs.
- Request that you should pay less for a higher tier drug because you can't effectively take any of the lower tier drugs.
- Please note: you don’t have to take a filled prescription from the pharmacy if you don’t want to. If you feel that the drug is too expensive, you can have the pharmacy hold it for you until you have time to discuss with your physician. Or you can ask for a partial refill (e.g., 15 pills instead of 30 pills) while you explore patient assistance programs that can help you pay for medications.
The benefit has been exceeded. This may happen, for example, if you have maxed out on the number of physical therapy or chiropractor visits you are allowed in a calendar year. Check your policy for the dollar or visit maximum before you go to these appointments. If you have exceeded your limit, your insurer still needs to apply the discount they have contracted with the provider. So you only have to pay the therapist what the insurance company would have paid.
Services Not Appropriate or Authorized
Services not considered appropriate in a specific health-care setting. These denials often happen if in-home care should be used instead of hospitalization, or emergency room care is used instead of in-office or urgent center care. You will need to show medical necessity or a medical emergency.
The effectiveness of the medical treatment has not been proven. When appealing an “effectiveness” denial, it will be helpful for you and your health care provider to include articles from peer-reviewed clinical journals that illustrate how well the treatment you received works. Medical publications and lab tests are very effective in helping you make a case in these appeals. Some good sources are PubMed, Medscape and Rheumatology Network.
The treatment is considered experimental or investigational for your condition. You may be able to get experimental treatments covered if you or your provider can prove one of the following:
- It’s medically necessary
- You’ve tried and failed other treatments
- It’s less expensive than standard treatment
- It’s been covered by your plan in the past for patients with similar medical conditions
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