Insurance companies are playing the odds, patient advocates say. They're counting on people not having the stamina to challenge every denied claim, even when there's a valid medical reason for a drug or treatment being covered.
"It's intimidating," said Betsy Imholz, special projects director for Consumers Union. "It's hard to understand the process and many people feel that the default answer from insurers is no."
Today I'll provide some tips on jumping through the myriad hoops the insurance industry might throw your way if you choose to appeal a denied claim.
While the appeals process is time-consuming and frustrating, it's often worth putting up a fight. A 2011 study by the Government Accountability Office found that for the relatively small percentage of denied claims that were challenged, about half ended up being reversed.
I wrote on Friday about Simi Valley resident Bill Waxman and his repeated run-ins with insurers and pharmacy benefit managers that denied claims for his 24-year-old daughter, Alison, who suffers from a variety of autoimmune disorders.
It usually takes him weeks of effort, but he routinely prevails.
"If the claim is for something out of the ordinary, their first answer is almost always no," Waxman, 66, told me. "I don't think they even look closely at the claim. They just say no.
"I've learned never to take no for an answer."
The insurance industry insists that denials result from a rigorous process of evaluating the medical soundness of prescribed drugs or treatments. However, the GAO report said many denials can be traced to billing errors or missing information. Something as simple as an incorrect code submitted by a doctor's office can trigger a denial.
The bottom line is that it's entirely possible you'll be able to get a denial reversed. But you'll have to be thorough and diligent and very patient in persuading an insurer that you're right and it's wrong.
"Insurers make money when you pay in through premiums and copays, and they lose money when they pay out," said Chuck Idelson, a spokesman for the California Nurses Assn., which supports a Medicare-for-all insurance system. "So they do everything possible to deny claims."
The first thing you need to do in mounting an appeal is to understand why the claim was denied.
Start small. Contact the insurer or pharmacy benefit manager and see if there's any paperwork missing or an erroneous code. The fix might be as simple as resubmitting a certain document.
If that doesn't work, you'll need to delve more deeply and take a crash course in medical/insurance jargon. It won't be easy.
Here's actual language from a denial letter received by Waxman from the pharmacy benefit manager Navitus Health Solutions. The claim was for a heart drug called Corlanor that a cardiologist believed would ease his daughter's postural orthostatic tachycardia syndrome, or POTS, which prevents sufficient blood getting to the brain.
"Based on the information we have received," Navitus wrote, "you do not meet number 2 and 3 of the prior authorization criteria because you do not have NYHA Class II-IV or ACCF/AHA Class C or D chronic heart failure and a baseline OR current left ventricular ejection fraction (LVEF) less than or equal to 35%."
What that means in English is that Corlanor is intended for a different heart disorder and Navitus isn't open to other uses.
Waxman's appeal thus began with him deciphering the denial. He then arranged for a peer-to-peer conversation between his daughter's cardiologist and a health official at Navitus.
When that got nowhere, he set about gathering information on the growing "off-label" use of Corlanor to treat POTS, including academic papers indicating the drug's efficacy in addressing the disorder.
Google is your best friend in surveying the medical landscape. But a website such as PubMed, operated by the U.S. Library of Medicine, can be helpful in chasing down studies on specific drugs and ailments.
After Waxman got all his ducks in a row, he wrote up his findings and sent them to the head of Navitus. This month he was informed that the company's medical director and pharmacists "have reviewed your appeal and have made the decision to approve the Corlanor for one year."
A Navitus spokeswoman declined to comment.
Remember, a successful appeal is an exercise in organization. Keep notes of all your phone conversations with company reps and files of all documentation.
Try not to lose your cool. The system is designed to wear you down and to weed out the weak from the strong. An insurer has nothing to lose and everything to gain from putting barriers in your path.
Something to keep in mind: Insurers are so unhappy about paying claims that the percentage of premiums received they have to pay back to policyholders is known as the "medical loss ratio." Seriously. To them, covering your healthcare is considered a financial loss.
Still stuck? Your next move is turning to the state Department of Managed Health Care. Even if they can't advance your cause, they'll probably be able to suggest fresh approaches.
Or you can file a complaint with the California Department of Insurance. The department's website has instructions for doing so.
"The system is structured so that insurers make money," said Idelson at the California Nurses Assn. "What you need to remember is that you're paying for care. You ought to be able to get it."
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