It happens all the time: health insurers deny a claim for no clear reason. According to the American Medical Association (AMA), some insurers rejected nearly 5% of the claims they received in 2013, although that number appears to be dropping. Patients stuck with large medical bills are often left trying to make sense of medical codes and fine print.
Fortunately, you do have a right to an explanation. “Insurers have to tell you why they’ve denied your claim or ended your coverage,” says the Healthcare.gov website. “And they have to let you know how you can dispute their decisions.”
Most of the time, this comes in the form of an explanation of benefits, or EOB. This document lays out what portion of the bill is being paid, and why all or part of it is being rejected. It might look like Greek to you, but most insurance companies provide a key to help you understand the codes on your EOB. Most also include a contact number so you can get in touch with the insurance company to ask questions. It’s best to go into that conversation well-prepared. To help you out, we’ve rounded up five common reasons your insurance company may deny your claim.
1. Non-covered charges
This was the No. 1 reason for rejected claims by Aetna, Anthem and Cigna in 2013, according to the AMA’s National Health Insurer Report Card. Similarly, the most common denial reason for insurers United Healthcare and Regence involved a request for additional information (for example, medical records), which can be a precursor to denying a charge or service as non-covered.
Perhaps your insurance company thinks the care you received was not medically necessary, or perhaps the treatment is considered experimental. In such a case, you should review the clinical policy guidelines for the treatment you received to see if you meet your health plan’s coverage criteria. Sometimes it helps to have your doctor go to bat for you and help convince your insurance company that the treatment you received was crucial for your health and well-being.
However, it’s also possible that the procedure really wasn’t covered, no matter how much you and your doctor think it should have been. Look again at the terms of your policy, as some plans do not cover certain categories of care, like infertility treatments or cosmetic surgery. If you think you’ll need care in the future that’s excluded from your current policy, you may need to start shopping for a new policy.
2. Referral or preauthorization required
When you see a specialist, your insurance company may require that you get a referral from your primary care physician. You may even have requested a referral, but it didn’t get entered into the system correctly. Sometimes referrals can be back-dated, so ask your primary doctor’s office to resubmit the one for you.
Procedures like CT scans or MRIs usually require preauthorization or prenotification, which is one step higher than a referral. Sometimes the provider will turn you away if you don’t have a preauthorization number in their system. But if you did manage to get the procedure done without your insurance company’s preapproval, your claim might be denied after the fact. If your doctor ordered the tests, you may be able to get the company to authorize it and get the claim paid.
3. Out-of-network provider
The number of people insured by health maintenance organizations (HMOs) is steadily rising. HMOs usually require participants to receive their care from specific medical providers. Going out of this “network” means you’re seeing a provider who hasn’t agreed to your insurance company’s terms of payment. If you received elective or non-emergency care and do not have any out-of-network benefits, your health plan may deny the claim as your responsibility or require a higher share of cost from you.
4. Minor errors
These can be the most frustrating, because they’re not your fault and it might take a while to pinpoint the issue. Is your name misspelled? Does your birthdate say you were born in 1882 instead of 1982? Did your doctor’s office enter the right diagnosis code?
If you just can’t figure out why your claim wasn’t paid, check for typos. It wouldn’t be the first time a claim was denied due to fiddly little data entry errors. Sometimes the error is in a part of the claim that you can’t see, like the insurance company’s group number. In that case, you need a really thorough and patient customer service representative to help you ferret out the problem.
5. Wrong insurance company billed
This is really basic: Did your doctor’s office bill the right company? Are you sure you have an active policy? If you’re seeing a healthcare provider you haven’t seen in a while, they may have an old insurance policy still on the books for you.
Make sure you double check that their information is up to date. Some insurance companies will also deny claims for work-related injuries or accidents because they think the responsible party should be liable. Having two policies can also cause some claims to be denied. For example, if you have coverage through your own employer and your spouse’s employer, it can cause problems with billing.
Anticipating some of the common causes of rejected health insurance claims can help you avoid them. But here’s hoping you won’t ever find yourself in this position.
Medical claim form image via Shutterstock.