My health insurance claim was denied. Now what?

Having a health insurance claim denied can be frustrating and stressful. While we probably won’t be there when you get the news, we do want to help you understand your options. Then, we can take the steps needed to address claim denials effectively.

According to KFF, an independent health policy research institute, Marketplace insurers denied 20% of claims in 2023. Medicare beneficiaries saw 10% of claims get denied. Those covered by their employer saw 21% of their claims denied. The more you use your coverage, the more likely you are to experience a claim denial, too.

So as these denials happen to more people more often, here’s what you can do to prevent them, and what you can do if they pop up on your explanation of benefits.

Why did this happen?

Before diving into solutions, understanding why claims might get denied proves helpful. Common reasons include:

• Missing or incorrect claim information
• Lack of prior authorization (if required)
• Services not covered by your policy
• Out-of-network provider issues
• Coding errors in the medical billing
• Missed submission deadlines

And the most frustrating part is, oftentimes it might not be clear why a claim is getting denied in the first place. KFF reports the top reason a claim is denied is the catch-all “other” at 34%, while the more concrete reasons above trail behind it. So frustrating!

So now what?

Good news: You have several options when your claim is denied, and many denials can be successfully appealed. Here's what you can do:

1. Review your Explanation of Benefits (EOB)

First, carefully read your EOB to understand why the claim was denied. This document might arrive to you in the mail, or it could also be available in your carrier’s online app or portal. You should now have a clear reason listed as to why your claim was denied.

2. Contact your healthcare provider

Reach out to your healthcare provider's billing department. As listed before, some denials occur due to simple coding or administrative errors. Your provider can correct and resubmit those. Your EOB will describe what services and procedures were billed.

Because your provider has an interest in getting paid for any service they provide, they’ll happily resubmit the bill in a way that meets your insurer’s guidelines. This is a great place to start before getting into the heavier lift options.

3. File an appeal

You have the right to appeal your carrier's decision. Recent data shows that up to 62% of appealed denials are ultimately overturned, so an appeal is often worth pursuing if you can’t get anywhere in the billing department. But unfortunately, it doesn’t seem like most consumers know this is an option. Only 1% of all denials get appealed. So, shoot your shot!

When filing an appeal:

• Follow your insurance company's appeal process exactly
• Submit all required documentation
• Keep detailed records of all communications
• Meet all deadlines for submitting appeal materials
• Include a letter from your healthcare provider supporting the medical necessity of the service

4. Seek support

Don't hesitate to reach out for help during this process, either. Action Benefits is more than willing to step up and help in cases like this. We're here to advocate for you and will help navigate the appeals process.

Remember, the buck doesn’t stop with the carrier, per se. If they deny your appeal unfairly, consult your state's insurance department. In Michigan, you can start this process on the Department of Insurance and Financial Services website. The chances of needing this level of escalation is small, but if the bill is extraordinary, your state can be an avenue to a resolution.

Preventing future denials

While you can't prevent all claim denials, you can reduce the likelihood of getting one in the first place. When getting a procedure, double check beforehand things like prior authorization requirements and whether or not your provider is in network. Of course, in an emergency this might not be an option.

It might be an easy one, but don’t forget to keep your insurance information up to date. Use your carrier’s app to double check basic information. Throw away those old cards when you get a new one.

Finally, make sure you understand what your coverage offers and what procedure you are getting. You will often be able to look up your coverage details to see whether and how a service is covered. If you wind up in over your head, ask for support.

We're here to help

A claim denial can be a jump scare. But, we here to support you through this process. Don't hesitate to reach out if you need assistance understanding a denial or navigating the appeals process. While dealing with claim denials can be challenging, you have options and rights as a policyholder.

Want to learn more about your coverage or need help with a denied claim? Take Action today, and we'll be happy to assist you.