Having your health insurance claim denied is enough to make you feel sick all over again — especially if you’re stuck with a large medical bill as a result.
The good news is that you’re entitled to an explanation, which normally comes from your insurer in the form of an explanation of benefits. The EOB will be full of codes and abbreviations, intended to explain what is being paid, and why some or all of the claim was rejected. Most insurance companies provide a key to help you understand the codes on your EOB, but that doesn’t always answer every question you’ll have.
Most EOBs also include a customer service number so you can ask those questions. It’s best to go into that conversation well-prepared, so we’ve rounded up five common reasons your insurance company might deny your claim.
1. Noncovered charges
It’s possible that the procedure you had wasn’t covered by your health insurance policy, even if it seems to you like it should have been. Look again at the terms of your policy, because some plans don’t cover certain categories of care, such as infertility treatments or dental surgery. If you think you’ll need care in the future that’s excluded from your current policy, you may want to shop for a new policy.
2. Referral or pre-authorization required
Procedures like CT scans or MRIs usually require pre-authorization, which your doctor should request on your behalf. Sometimes the procedure provider will turn you away if you don’t have pre-authorization; in other cases, your claim might be denied afterward. If your claim was denied but your doctor ordered the tests, ask your doctor to contact the insurance company on your behalf.
3. Out-of-network provider
If your insurance is a health maintenance organization or an exclusive provider organization, your claim may have been denied for going outside of the plan’s provider network for care. Going out of an HMO or EPO network means you’re seeing a provider who hasn’t agreed to your insurance company’s terms of payment. If you received elective or nonemergency care and do not have any out-of-network benefits, your health plan may deny the claim (making payment your responsibility) or require you to pay a bigger share of the cost.
4. Minor transcription errors
Is your name misspelled? Does your birth date say you were born in 1978 instead of 1987? If you can’t figure out why your claim wasn’t paid, check for typos. It wouldn’t be the first time a claim was denied because of minor data entry errors. In that case, call a patient customer service representative to help you fix the data 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 provider you haven’t seen in a while, it may have outdated insurance information on file for you. 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. Double-check that your provider has up-to-date information in a timely manner, because if the claim is filed too late with the correct insurer, it could be denied.
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.
This post has been updated. It was originally published Aug. 11, 2014.
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