Fighting Back When Health Insurer Won’t Pay
Submitting health insurance claims is time consuming and frustrating. But more frustrating still is having a claim denied.
There are dozens of reasons why your insurer may reject a health claim. Perhaps the company thinks the claim isn’t covered by your policy. Maybe you’ve submitted the claim to the secondary insurer and it should have been paid by the primary company. Or, perhaps, the insurer will pay part of the claim, but not all of it because the insurer thinks the doctor charged too much.
The good news is that a health claim rejection is not necessarily the final word on the subject. Consumers have the right to appeal when their insurer denies a claim--regardless of why the claim was rejected.
No one keeps statistics on how many of these appeals are ultimately successful. But insurers say that appeals almost always work to the consumer’s advantage. The reasons are simple: Some claims are denied in error. Sometimes there are extenuating circumstances that could cause the insurer to pay more. And sometimes the insurer will simply reconsider.
How can you appeal a health insurance denial? Insurers suggest that consumers write to the office where they submitted the original claim to get a review started. Generally, the insurer will get back to you within 60 days. However, often you don’t even need to go to the trouble of writing. A simple appeal usually can be handled over the phone.
The easiest appeals are those that deal with whether an individual or a procedure is covered under the policy. For example, if you submit a claim for your 19-year-old under your family health plan, the insurer may reject the claim saying the child is too old to be insured by you. But if the child is a full-time student, he or she may still be covered. To appeal such a rejection, all you have to do is call or write to inform the insurer that the child is in school and is thus covered under the terms of your policy. Most reputable insurers will respond by paying the claim without further fuss.
Among the toughest claims to appeal are those dealing with so-called UCRs--”usual, customary and reasonable” charges.
In a nutshell, this boils down to an insurer saying that your doctor overcharged you. Health insurers will say they know the doctor overcharged because they keep statistics on what the normal fees are for various procedures in various geographic areas. But there is a certain amount of subjectivity involved.
Two different insurers may have completely different UCR numbers for identical procedures. Additionally, even if UCR statistics are identical, two different companies may pay different amounts. Why? One may be a little more liberal in their definition of “reasonable” than the other.
Charges for a particular surgery may range from $1,200 to $1,800 in a given area, for example. Insurer A may say that claims amounting to 90% of the highest charge are reasonable, while Insurer B may only go up to the 70th percentile. In other words, if your doctor charged $1,800, you might get $1,740 covered if insured by A, and only $1,620 if insured by B.
Appealing a denial based on UCRs takes some legwork. You should call at least three other health care providers and find out what they would charge for the same procedure, said Melanie Marsh, a spokeswoman for the Health Insurance Assn. of America in Washington. (Medical procedures are identified by code numbers on your medical bill. Use the code number when calling around to be sure to get a good comparison.)
This informal survey should help you determine whether the problem is your insurer or your doctor. Some people will find that their doctor truly is charging more than most others in their area. If this is the case, it’s wise to contact the doctor’s office to find out why.
Sometimes the doctor’s charges are boosted because of some extenuating circumstance--an emergency procedure done at 2 a.m. or complications that caused your operation to take twice as long as usual. Perhaps it was an unusual procedure that required someone with rare and expensive talents. Any of these reasons could be the basis of your insurance appeal. (The doctor should have noted any special circumstances on the original bill, but they don’t always do so.)
If your doctor simply charges more, your options are likely to come down to paying the extra amount or arguing with the doctor. Sometimes doctors will reduce their fees when faced with an irate and knowledgeable consumer. And some insurers will help by providing the consumer with statistics.
On the other hand, if your insurer’s UCRs seem out of line, you can write and say so. Be sure to include a list of the surveyed doctors, their charges and their phone numbers. Some insurers have updated their UCR figures because of consumer appeals. If the insurer’s numbers are out of line and it fails to fix the problem, contact the company’s regulators.
Health insurers can be regulated by a number of different state agencies, depending on whether it is an indemnity insurer, a preferred provider organization or a health maintenance organization. If you’re unsure, start with your state insurance department. They’ll help or provide a referral.
