Insurance Claim Denials and Appeals 101
Your claim has been submitted and processed, but now the Explanation of Benefits (EOB) shows the claim has been denied. Leslie Lobel, Director of Health Plan Advocacy at Undivided, has some tips to help you understand and perhaps even resolve a claim denial.
- First, try to identify the cause of the denial and possible avenues for remediation. Look on the EOB for a denial code and descriptor, also called reason code or notes. Read them and be ready to address them; the onus is on you to prove that no one in-network can provide what you need.
- Know your deductible. It may be that the claim has actually been processed but paid to the deductible accumulator rather than generating a payment to you.
- Know your benefit and session limits. Frequently used services for children with disabilities — such as occupational, physical, and speech therapy — often have limits on the number of treatment sessions or visits allotted each plan year. If your child uses more than one of these services, be aware if any limits are combined between these services or whether there is a separate limit for each type. If there are indeed limits, you may be able to request more for the current plan year, or there might be a hard cap for the year.
- Know when to submit your claim. Timely filing limits vary by plan, so you might have anywhere from six to eighteen months from the date of service to file depending on your health plan. If you fail to file within that time frame, it’s likely to be the reason for denial.
- Understand that some claims with pre-authorizations are difficult to process correctly the first or even the second time. This is one of the many reasons it’s important to label the superbill — which is a detailed invoice from your provider that itemizes all services and information the plan requires — as well as the claim with a pre-authorization number. (If the health plan provided a copy of the authorization letter, be sure to include it with the claim.) It often helps to get a supervisor involved because they may be able to re-enter the correct processing instructions in real time if you can demonstrate that they had all the information they needed to get it right the first time.
Communcating with Your Health Plan
Once you’ve done your best to figure out why your claim was rejected, it’s time to contact your health plan.
Phone calls with customer service
- Be ready to take notes. Have a pen and paper or laptop handy, along with all the information you’ll need: plan ID number, date(s) of service, billed amount, and claim number. This saves time and signals to the representative that you know what you’re doing.
- Avoid calling on Mondays, as this is generally the busiest day of the week, and remember that lunch time is the busiest hour of any day. Try the earliest or latest hours of the day or weekends if available.
- Always get a name and a reference number, and note the date. No call is too mundane to request a call reference number. Being able to substantiate what was said could make a difference in the outcome of the claim.
- Give the plan representative your callback number early in the call just in case you get disconnected. If they have your number, they will call you back in most cases. This way, you won’t have to start all over again on hold and then identify your account with a second agent.
- Ask for a specific timeline for completion of tasks that the plan undertakes on your behalf. Buzz words that can work to request quicker resolution are VIP processing, expediting processing, and assignment to a resolution team. Note the language that the customer service representative uses so that you can mirror it back in future calls.
- Have busy work to do in the background to help you to stay patient. Waiting on hold is a good time to tidy up your inbox or dust your keyboard. Don’t call when you are short on time because most calls will take longer than you think.
- Try to say “thank you” whenever you can, and apologize if you lose your temper. Customer service reps deal with hostile callers all day, so try to find something positive to mention regarding the assistance they provide.
Depending on your plan, live chat may be available during regular customer service hours.
- Pros: You will experience less wait time to connect, you can retain a log of the conversation, and there is no hold music.
- Cons: It can be arduous if you need to type out complex questions.
- Pros: You can message after regular hours, and the thread will stay archived in the message center.
- Cons: Replies usually take several business days, and you will have to remember to log back in and to check for a response. This option is better for non-urgent matters.
Before you start an appeal, be sure that there is a solid basis for your request. If so, you’ll want to tell a concise and compelling story, substantiated by facts, regarding the terms of the benefits and coverage on your plan. Remember that you are appealing for what the plan is obligated to deliver that qualifies as medically necessary and is not specifically excluded from your health plan.
Review the plan’s evidence of coverage (EOC) for any parameters established to exclude, limit, or narrowly define the service you want funded. This lengthy document can often be found in your plan’s member portal or via call or live chat with customer service. For some employer-based plans, it is available only from the HR department. The EOC will typically list excluded diagnosis or treatment types.
Creating an appeal packet
Appeals require some combination of these essential elements:
- Initial evaluation for a plan of care and measurable goals
- Progress report
- Prescription with diagnosis, frequency of service, session length, and treatment duration
- Office visit or daily treatment notes
- Letter of medical necessity from your child’s therapist or physician
- Summarizing cover letter
In your cover letter, list the start date and end date, duration, or frequency for the service you seek or the specifics of the item to be funded. Your plan may have a form to attach to your packet that can be found online, or it may be included with an EOB.
Offer the writing physician a letter template with a header containing all the relevant plan information, ID number, and any group number with a list of points that you would like made. Include a copy of the denial or the report of the service provider treating your child. Be aware that there are often non-reimbursable documentation fees from your specialist and/or the treating therapist. Give your therapist or physician ample time to generate the needed documentation.
Don’t mention or include reports that reference educational services. Medically prescribed services should not be confused with those that are educationally based. However, don’t let the plan pass the buck to the school district. They will try to in many cases, so don’t play into their hands.
First level of appeal
Mail your completed packet to the grievance and appeals address on your EOB via certified mail return receipt, fax, email, or online messaging depending on the options for your plan. Keep copies of everything you submit.
Follow up one week after submitting to confirm receipt and determine the reference number assigned to your appeal. You should also note the calendar date on which the thirty- or sixty-day clock began for a determination. After that amount of time passes, you can call to get an answer if you do not want to wait for the plan to send you a letter.
Second level of appeal
If you receive a denial, also known as an adverse determination, don’t despair. Read your denial letter carefully. It will state the exact reason that the denial was made. Remember that the first no is not the final no! Since there are additional levels of appeal, the plans have little incentive to say yes the first time. They count on a certain number of families to give up.
Your second in-house appeal should specifically answer whatever assertions the plan made in the denial. If you feel you have cause to appeal again, respond to their exact contentions. Additional documentation may be required from your child’s therapist or physician along with a new cover letter that includes the reference number for the denial. Be sure to read the fine print in your denial letter for the deadline by which you need to submit a subsequent appeal. Include a copy of your original appeal and the plan’s determination letter.
Third level of appeal (external)
If you have exhausted both levels of in-house appeal and you still feel you have a valid answer to the plan’s objections, you have one last level of appeal external to the health plan: an objective and impartial review by a third-party organization.
The health plan’s determination letter will say which agency covers external appeals for your plan. This might be your state’s Department of Insurance or Department of Managed Health Care, or an independent review organization. In the case of some self-funded plans, the third level of appeal is with the company’s board of directors.
After this level, your last resource would be to have an attorney contact the legal department at the plan.
Dealing with denied claims may seem daunting, but your efforts could have a beneficial outcome. Don’t hesitate to reach out for support or ask others to read your cover letter to make sure that your argument is succinct but complete. Good luck!