Facing insurance denial? Steps to take next

Insurance denial is frustrating for anyone to cope with, whether you are denied a procedure you have been waiting for or life-saving care. It is crucial to understand the ins and outs of the insurance appeal process, as well as your best path forward when you receive denied insurance claims. 

Have you ever submitted an insurance claim for an expensive procedure or operation, only to receive a startling response: Denial. One simple word can cause untold amounts of heartache and financial distress. 

In this article, we will explore what to do when you face denied insurance claims, how to appeal an insurance decision, and more. 

Understanding Insurance Policies 

An insurance policy represents a contract between a policyholder and an insurance company. The policyholder pays a premium, usually monthly or annually, for access to a certain amount of coverage or benefits. 

Some of the most common types of insurance include: 

• Home insurance
• Car insurance 
• Disaster insurance
• Limited liability insurance
• Medical insurance
• Dental insurance 
• Life insurance 

All insurance policies have the same basic function, but their mechanisms differ slightly. Medical insurance, for example, often has a deductible before policyholders can begin to use their benefits. Dental insurance, on the other hand, usually has an annual cap, which is the total amount you can spend before your insurance no longer covers dental services. 

Some insurance policies, such as life insurance, are even trickier. When you pay premiums on a life insurance policy, you must keep it active for your beneficiary to receive a lump sum upon your death. You can also borrow against the accumulated policy amount in your lifetime. 

What Is Insurance Denial? 

An insurance denial occurs when you submit a claim to use your policy that is not explicitly covered. Many denials are the result of an automated process, but sometimes, more complex cases go through individuals who look at all aspects of a case to determine the coverage.

Some of the most common reasons for insurance denials include: 

• Coding errors
• Inaccurate information
• Pre-authorization denial 
• Over the coverage limit 
• Policy lapses
• Duplicate insurance claims 
• Suspected insurance fraud
• Failure to pay insurance premiums or copayments 

Is It Worth Appealing an Insurance Denial? 

It depends. If the appeal is for a needed procedure or something very expensive, it may be worth it to appeal to the insurance company to try and get coverage. An important surgery, for example, can cost hundreds of thousands, or even millions of dollars, which is unaffordable to the average policyholder. 

However, if your original claim was a shot in the dark, then it may be better to take the loss. If you attempted to get coverage for a cosmetic procedure, for example, then it is unlikely the insurance company will change your mind unless the proposed procedure has a clear health benefit. 

The Insurance Appeal Process 

The insurance appeal process depends on the type of insurance, as well as the specific insurance company. Some companies may only allow a certain number of appeals, while others may have a third party on hand to review complex claims. 

When you receive the initial denial, look for an obvious reason why. Sometimes, the insurance company may state exactly why coverage was denied. If the reason is absent, call the company and speak with a representative to see if you can glean more information. 

Next, you need to file an appeal. Ask the insurance representative or search on the insurance carrier's website to determine how to appeal an insurance denial. You may need to fill out an online form or print out paperwork that needs to be sent in through physical mail. 

It is important to know your rights when it comes to filing insurance appeals. Work with an attorney to determine whether you have the right to a third-party reviewer or additional support for your insurance claim denial. 

Frequently Asked Questions

How Do I Avoid Insurance Claim Denials in the Future? 

If you have to suffer through the insurance appeal process, you may be hesitant to file a claim in the future. It is still important that you take advantage of your insurance policy; after all, you pay for it. 

To avoid potential claim denials, read your policy as closely as possible. Make note of any text that specifically references your claim so you have it ready if you need to file a claim appeal. 

Consider calling your insurance company and speaking with a plan representative. He or she will have more extensive knowledge of the plan details and can often run simulations on your behalf to determine which codes will go through. 

It is important to understand, however, that sometimes your claims will still be denied even when you exercise due diligence. Some types of claims are not determined by an automated process, but by an individual who weighs many different factors before making a decision. 

How Often Are Insurance Appeals Successful?

It depends on the industry. The American Medical Association reports that over 80% of pre-authorization appeals are successful, which means that four out of every five claim denials from pre-authorization go through after receiving an appeal. 

Research your specific insurance policy to see if you can find an estimate of how successful your appeal might be. You should also consider working with a law firm, such as Belluck Law, that can dig deeper and determine your odds of successfully appealing a claim denial. 

Does Insurance Denial Affect My Credit Score? 

No. As long as you pay for the service or procedure, or continue with the appeal process, your credit score will not be affected by an insurance denial. However, you may face consequences if unpaid bills are sent to collections. 

Appeal an Insurance Decision Today

Navigating an insurance denial is often a lengthy and unpleasant ordeal, but you do not have to go through it alone. By knowing your options and using available resources, you can make an informed decision and know your rights throughout the process. 

If you would like more legal tips, tricks, and guides, take a look around our website. 

This article was prepared by an independent contributor and helps us continue to deliver quality news and information.