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Health Insurance: Claims: Appeals

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If you are denied the right to get a procedure or treatment or use a drug, or if an insurer refuses to reimburse you, consider the following expert advice. As you do, keep in mind that it is advisable to Be persistent. Don't give up. .Studies indicate that 70% of appeals result in favorable action for the insured. (If you decide at some point that continuing to push is not worth your time, stop appealing. That is also a valid choice.)

Call the insurer immediately. 

  • If you have a contact at the insurance company, speak with that person. 
  • If your insurer has case managers, ask to speak with one of them.
  • If you do not have a contact, and there are no case managers, you will likely be transferred to the first available claims representative. If you do not like the person for any reason, ask to be transferred to a different representative. 

When you reach a person who will handle your claim:

  • Write down his or her name and extension number.
  • Try to make a friend with the person with whom you speak. You will save a lot of time not having to re-explain your situation each time you call. You will also have a better chance of getting what you need. One person sent a photo of herself and her kids to the representative and they bonded as parents.
  • Ask for details of why your claim was denied.
    • Perhaps there was a clerical error.
    • Perhaps there was a missing fact that you can supply.
  • If the denial was made after consultation with a medical professional, ask the insurer to send you (in writing) the name(s) and qualifications of the professional(s) who reviewed your claim, together with the medical literature the person relied on. Also ask what the medical professional(s) would suggest instead.
  • Let the person know that the call is not meant to be an appeal.  Instead, let the person know the call is just "an inquiry. "
    • Do not appeal over the telephone. Only file an appeal in writing.
    • Do not appeal just with a simple note. Instead, follow the procedure outlined below - including supporting documentation
  • It is okay to ask the insurer to reconsider your claim - while making it clear this request is not an appeal.

If you do not receive a positive response within 3 - 5 days, consider taking the following 10 steps, each of which are explained in more detail in other sections of this document.

Step 1. Find out why your claim has been denied if you do not already know.

You are entitled to know why your claim has been denied.

Denials fall into two categories: Clinical and Administrative

  • Clinical - clinical matters are those which relate to your treatment or other health care. The question is generally whether the care you want is "medically necessary."
    • For practical purposes, assume you are entitled to the same information available to a person protected by the federal law known as HIPAA. Consumers protected by HIPAA are entitled to receive a notification of adverse benefit determination (Notification) which must include:
      • The specific reason for the adverse determination. 
      • If the determination is based on a medical necessity or experimental treatment exclusion or limit, the Notification must include an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to your medical circumstances.
      • A reference to the specific plan provision on which the determination is based.
      • A description of any additional information you could provide to get the claim reconsidered -- together with an explanation why the material or information is necessary.
      • A description of the plan's review procedures and the time limits that apply. The plan must provide for a speeded up (expedited) review process if the situation involves care needed urgently.
    • If a review was made by a credentialed professional familiar with the type of treatment, ask:
      • For the person's name and qualifications in writing.
      • Whether that person has suggested an appropriate alternative care which is likely to be as effective as the care you requested.
  • Administrative - all other matters such as notification, authorization, time frame for claim submission and appeals. 
    • You are entitled to know the reason for the denial. You are also entitled to a copy of the rules and regulations which are the subject of the denial.
    • Because of the Affordable Care Act (Obamacare), health plans cannot retroactively cancel insurance coverage solely because you or your employer made an honest mistake on your insurance application.

Step 2: If you have group insurance (say, through an employer), find out whether it is "Self-funded" or "Fully-Funded"

If you have insurance through a group, such as an employer, it is important to find out if it is "fully-funded" or "self-funded." (Since most groups that have self funded insurance are employers, we'll refer to the group as "employer" for this discussion).

  • With "Fully-funded" health insurance, the employer purchases insurance from a health insurance company. It is the insurance company's pocket that pays health insurance claims - not the employers. 
  • With "Self-funded" health insurance, the employer self insures. The employer may hire an insurance company to adminster the plan. However, it is the employer's pocket that pays the health insurance claims. 

Whether coverage is "fully-funded" or "self-funded" becomes important because of the following reasons:

  • If your plan is "self-funded" you can ask the Human Resource (HR) department to get involved to get your claim paid. HR personnel would speak with the insurance people as co-employees of the same employer.
  • Most states have an external appeal process which means that if you are not satisfied with what happens in the insurer's internal review process, you can appeal for justice outside the insurance company. State mandated external appeal laws only apply to "fully-funded" coverage, not "self-funded" health coverage.
  • "Self-funded" plans are governed by a federal law known as ERISA. ("Fuly-funded" plans are not covered by ERISA). ERISA is helpful because:
    • ERISA requires a "full and fair review" of a claim. 
    • As a practical matter, "full and fair review" means that you are entitled to a free copy of 
      • Everything that was relied on in making the decision to reject your claim
      • Everything the insurer had that supported your claim, but was not relied on when rejecting your claim.
      • The insurer's clinical criteria.  This is basically a detailed explanation of when a treatment is covered and when it is not, with the reasoning the insurer uses.
    • "Full and fair review" also means that your employer has to provide reasons for their rejection. As you will see, the reasons are needed so you know what you need to rebut. 

Step 3. Review the appeal process.

For health insurance plans issued after September 23,2010, appeals are standardized, including a right to an independent, external review board. The appeals process will be available even when coverage is canceled.

Review the information supplied to you in Step 1 or your insurance policy or summary plan description for information about the company's appeals process. Be sure to note:

  • The date by which an appeal must be filed.
  • What papers are required to be filed with an appeal.
  • Your rights for an appeal.
  • The rights of the insurer.
  • The precise procedure for filing an appeal. (Even a minor slip up can cause an insurer to deny an appeal).
  • Any information about the various deadlines for appealing a decision.

If you are unable to find this information in your policy or summary plan description, it is likely that you still have the right to an appeal under the company's procedures -- or at least under federal or state law or both.

NOTE: If the insurer says you do not have a right of appeal, or the procedure doesn't seem fair, you check the law to see what is mandated. For example, if you have commercial health insurance group coverage through your employer: the federal law known as ERISA, gives you a right of appeal. For information, click here. If your policy is an individual policy: Many states have laws mandating appeals similar to ERISA. To learn about the law in your state, see: www.consumersunion.org/health/hmo-review/states.html offsite link and www.kff.org/consumerguide/7350.cfm offsite link

Step 4. Focus on deadlines and company procedures.

  • Keep track of the deadlines and procedures for filing your appeal.  Insurers are very fond of deadlines as they apply to the member and will usually follow them as closely as possible.
  • Insurer deadlines may seem arbitrary. However, it is safer to assume you have to follow them with no leeway. If you miss deadlines or do not follow the plan's procedure, you are likely to lose your right to appeal for good.
  • NOTE: Send EVERY piece of correspondence by certified mail, return receipt requested. This method will provide inexpensive proof about when you took action.

Step 5. Consider time tested techniques and arguments to prove your case. Focus on obtaining new information to back-up your position.

  • It generally takes something more than what an insurer has already seen to get it to change a denial to an "okay."  In order for the denial to be reversed, you generally either have to provide some additional information or illustrate to the company a new way to look at what it already has.
  • Before doing anything, contact your doctor and ask for a copy of your medical record and what was sent to the insurer. The earlier you start with this request, the more likely you will get the information on a timely basis. This information will give you an idea of what the insurer saw. It will also be needed if you have to appeal beyond the first level. There is generally a good deal more time to file the first appeal than the second appeal.  You will definitely need this information for the second appeal - so start getting it now.
  • The sooner you start preparing your argument, the more time you have to hone it. You'll also need time to have your documentation reviewed by your doctor and perhaps other doctors who can support your argument. For instance, don't hesitate to contact doctors whose names are on research papers or articles that bolster your argument.  They may be willing to provide a supporting letter, or at least supporting information. 
  • Keep in mind that from an insurer's point of view, objective evidence which cannot be exaggerated is likely to hold more weight than subjective evidence. For example, an insurer is likely to give more weight to the result of tests compared to subjective reports such as about pain levels or the number of times you threw up. That's not to say that you shouldn't include subjective evidence. You should. But also include as much objective evidence as you can. 
  • For helpful information, see:

Step 6. Consider consulting a professional. Free advice is available.

Consider consulting a professional to help frame your appeal. A professional can help figure out what information to include and how to say it. Alternatives include:

  • Free advice from Patient Advocate Foundation, www.patientadvocate.org offsite link, Tel.: 800.532.5274
  • Free advice from Caring Voice Coalition, www.caringvoice.org offsite link. Tel: 888.267.1440
  • A disease specific nonprofit organization.
  • A financial planner. (For how to choose a financial planner, click here)
  • A claims assistance professional. Locate a professional through www.claims.org offsite link. Tel: 877.275.8765. For  information about claims assistance professionals, click here.
  • A Health Insurance Assistance Program in your state. 
  • Depending on the urgency of the need or the amount of money involved, this may be a good time to bring in a lawyer to do the work for you. 
    • If you do consult with an lawyer, and the appeals procedures don't work, the lawyer will be in a position to advise whether it is worthwhile to involve the legal system. 
    • If you do not have the money to pay a lawyer, there may be one to work on a contingency basis or possibly for a discounted rate or for free. (A "contingency basis" is when a lawyer gets paid from the amount the other side pays. If there is no payment, the lawyer does not get a fee).
    • For information about finding, choosing and working effectively with a lawyer, see How To Find A Lawyer and How To Choose A Lawyer

Step 7. Look for sources for support for your position.

  • Your opinion that the claim should be paid, no matter how well reasoned, will generally not be enough to convince the insurance company to reverse the denial of a claim. You are going to need evidence to support your position.
  • The most likely source for supporting evidence will be your doctor(s) -- particularly the doctor who suggested and/or provided the procedure. If the treatment or procedure being denied was provided by a specialist, the support of your primary care physician may also be helpful.
  • Ask the doctor directly (instead of office staff):
    • To contact the insurer's medical director to find out if he or she can get more detail about the problem and see if an informal agreement can be reached.
    • For a letter supporting his or her decision to recommend or provide the treatment in question. This will need to be more than just a quick note, so give the doctor enough time to work the letter into his or her schedule. Remind the doctor that the letter should include the following:
      • The doctor's qualifications.
      • The source of the doctor's knowledge about the matter, such as experience in the specialized area, additional training, articles from journals, or the like.
      • Detailed medical information supporting the use of the treatment or procedure or new use of a drug in your case.
      • Resources to support the doctor's recommendation. Ask the doctor to include the source of his or her knowledge on the matter, such as experience in the specialized area, additional training, articles from journals, or the like.
      • For a sample cover note, click here. 
  • Remind the doctor of the filing deadline. Ask when you will receive the letter. Hopefully it will be with enough time for you to review it before sending it on to the insurer. It is advisable to call the doctor's office a few days before the date the doctor told you to remind him or her of the schedule. If the deadline passes, call the doctor every day until you have what you need. 

Step 8. Look for sources of influence that will help convince the insurer to your point of view.

Consider whether you have any sources of influence you can call on that can help to separate you from the pack and convince the insurance company to give you a swift, favorable decision. Possible sources of influence are:

  • Someone higher up the chain in the insurer When sending an appeal, send a copy to the plan's General Counsel or to the Vice President in charge of Customer Relations. If he or she gets involved, your case will get vastly more attention than any letter from a member or outside doctor.
  • Your Employer If you have health insurance through your employer:
    • Speak with the person in charge of handling claims. Perhaps the person has experience with the appeals process and can offer valuable advice or assistance. She or he may also be able to provide contacts at the insurance company who may be more sympathetic or cooperative. Alternatively, your contact may be able to tell you who to avoid.
    • The person in your company who obtained or negotiated the health insurance contract with the insurance company may be able to convince the insurance company to approve your claim.
  • Local disease specific nonprofit organization  In addition to the valuable information such an organization may have regarding your condition, treatments, insurance information, or advice about the appeals process, a friend there may be willing to call the insurance company and let them know the organization's view that this is the type of situation that health insurance policies should cover. Insurance companies do not want community groups telling people that the company does not pay their claims.
  • Social Network Sites Insurance companies have learned to troll social networking sites to look for complaints and other postings that can damage their reputation. The people in charge of watching their brand can influence the claims decision makers.
    • Talk about unreasonable claims denials on your Facebook and other social networking pages.
    • Twitter about the situation.
  • Advocacy Groups That Work To Sway Public Opinion Or Lobby Government  An advocacy group may be willing to help with your claim. Since they are used to lobbying politicians, one of these groups may be able to use their know-how with your insurance company as well. Advocacy groups include religious, community, disease-specific (e.g. cancer, HIV), or age specific (e.g. AARP) organizations.
  • Press/Media Negative publicity can work wonders in convincing an insurance company to reverse a decision. Consider contacting your local television, radio, or newspaper consumer advocate with your story. Media: How To Tell Your Story tells you how to make your story into one in which the media may be interested.

Step 9. Write a cover letter which is polite but firm. Also consider filing a complaint. Follow up.

If you are handling the appeal yourself, write a cover letter once you assemble the additional material. In the letter:

  • Explain how the material shows that the claim should be covered under the policy.
  • Cite any policy provisions that support your position.
  • Do not threaten the insurance company
    • You want the company to be open to listening to what you have to say rather than being defensive. On the other hand, indicating in your letter that a copy is going to an attorney or an advocacy group is a non-threatening way of letting the company know you intend to rigorously pursue your claim. 
    • Other ways to to let an insurer know you are serious without making overt threats are:
      • Mention applicable statutes, rules and regulations in your letter. 
      • Note on the bottom of the letter that you are sending a copy to the state insurance commission, and to the state legislator in charge of the committee that oversees the insurance industry. You can locate contact information for your state insurance commission at www.naic.org. offsite link  You can locate information about your legislators at www.usa.gov offsite link
  • Be sure your letter is rational and reasonable. Regardless of what you believe to be true, indicating that the insurance company simply wants to deny your claim, or that they are crooks or liars is likely to hurt your appeal. You also do not want the insurance company to be able to produce a document indicating that you have been "unreasonable."
  • Mention that under law, claims have to be paid promptly. Most state laws and Medicare have such a provision. 
  • Keep in mind that the person reviewing your appeal will review only written information. Thus, it is important that you include in writing all the reasons why the denial of your service or claim is wrong.
  • For an example of a sample letter:
  • Once you have written your cover letter
    • It is a good idea to have your letter reviewed before mailing to be sure it says what is needed.
    • Preferably have the content reviewed by a lawyer, a financial planner who works with people with life changing conditions, or a professional patient advocate
    • At least have a trusted friend or family member read it before mailing to be sure it says what you want.
  • Make a copy of the letter and any attachments for your files. Send your letter via Overnight Service or by Certified Mail-Return Receipt Requested. To prove that an appeal was sent and received in a timely manner, keep a copy of the receipt verifying delivery attached to your copy of the claim. 
  • Consider filing a complaint with the state regulatory agency.
    • State regulatory agencies oversee insurers. An insurance company is likely to pay more attention to a situation if it knows the regulatory agency is looking over its shoulder. 
    • Your insurance plan will likely tell you whether the regulatory agency is your state Department of Insurance or Department of Health. If you have a question, contact your state insurance department. For contact information, see, www.NAIC.org offsite link
  • Follow up by telephone every few days to keep your claim moving forward quickly.
    • Preferably speak with the person who has been in charge of your case. Otherwise, keep a record of the name, title, and direct phone number of each person with whom you speak .
    • Note a summary of the conversation.

Step 10. Once you exhaust the insurance company's internal appeal process, consider an external appeal. 

Because of the Affordable Care Act,  once you exhaust the entire appeal process inside the company, all health plans are subject to external appeal (appeals to a body outside of the insurer.)

To learn how to do an external appeal, ask your insurer about details for external appeals. 

If all else fails, consider accessing the legal system and/or complaining to your state insurance department.

Once you have gone through all the internal and external appeals:

  • Speak with a lawyer if you have not already done so yet. A lawyer can advise you whether it is worth going to court. In addition to an action to enforce your insurance contract, you may have an action for consumer fraud if there is an inappropriate denial of coverage.
  • Consider filing a complaint with your state Department of Insurance. To find contact information for your insurance department, see: www.naic.org offsite link.To learn about complaining  to regulators, click here.

NOTE:

  • If the treatment or procedure is vital to your health, consider moving forward with it while you to continue to work to get the insurance company to pay for it. 
  • If you are in a Medicaid managed care plan: You may have special rights in the appeal process. Contact the state Ombudsman or Medicaid customer service for the state in which you live.
  • If you receive Medicare: A good source of information is the Medicare Rights Center: www.medicarerights.org offsite link, Tel.: 888.466.9050.

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