Don’t take “No” from your insurance company

When a health insurer denies a claim, health care providers typically suffer the consequences. In some cases, the policyholder may pay the bill themselves. If not, doctors and hospitals end up losing revenue they are owed for services they provided. However, recent data collected by the Government Accountability Office (GAO) suggests that a denial of a claim for health insurance is not necessarily the end of the road. The report discovered that nearly 50 percent of rejected claims are actually reversed on appeal.

There can be a number of reasons for an initial denial. These include billing errors and missing information. Many times an incorrect code entered by the doctor’s office will result in an automatic denial of a claim. Claims are denied most often because the service is not covered under the policy. This can be a subjective determination and varies greatly depending on the coverage provided. In many cases, there can be an argument as to whether a benefit should be covered under the insurance contract.

Insurance companies may even deny claims as a regular practice in the hopes that an appeal will not be made. In fact, insurance companies benefit from denying claims automatically. If an appeal is not made, then they have avoided making the payment. If an appeal is made, then they may or may not pay. At the very least the payment has been delayed, and, as a result, the insurance company is able to keep earning interest on the money they would otherwise have paid to the health care provider. In such cases, insurance companies inappropriately profit from money that does not rightfully belong to them.

The insurance claim process can be quite complex and cumbersome. Policyholders and health care providers may end up accepting a denial because they feel incapable of tackling the insurance company themselves. Thousands of insurance claims involving millions of dollars are incorrectly denied each year. Policyholders and health care providers should remember to challenge the insurance companies, especially when they think that a claim has been inappropriately denied.

Source: The Associated Press, “GAO report shows success in health insurer appeals,” 16 Mar 2011 

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