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When you have health care coverage, sometimes a request for a service or procedure is denied by the insurance company. This can be quite concerning when the service is medically necessary.
When a request is denied, Medicaid and all private third-party payers are required to have a comprehensive way for appealing the decision. A notice of denial should always come in the mail from the insurance provider to the family with instructions on how to appeal. Medicaid usually has an appeal form on the back of the denial letter. Make sure that the denial is always sent to your address, not the provider of the service denied. While it may seem bothersome and time consuming, filing an appeal can often be successful.
Steps to take for appealing a decision:
- Read the denial letter, taking note of: the deadline date for you to appeal, and the reason for denial of coverage. Be aware that each policy has different levels of appeal. Check with your insurance provider to find out what their appeal process/levels look like.
- If your claim is denied due to a particular service being billed or coded incorrectly, your physician’s support staff may be able to gather and submit the necessary information on your behalf, in order to resolve the issue without the necessity of a formal appeal.
- Check your insurer’s appeals process. In the coverage documents and summary of benefits, insurance companies should give all the tools needed to properly make an appeal.
- Check that the diagnosis or an alternate diagnosis is covered on the policy, and that the requested item is not a clearly stated exclusion.
- Phone the person who signed the denial letter. In some cases it may be helpful for the care coordinator or clinician to call if the family is unable to get clarification. Ask why the coverage was denied, if this is still not clear to you; ask to speak to the supervisor for clarification.
- Inquire about specific examples of what would allow coverage for the specific service or item (e.g., use a different diagnosis, indicate impact differently, more clarification of the child's condition, a different vendor, etc.).
- Document all contacts and conversations in this process.
- Based on the information gathered, decide if an appeal has a chance at success. If the reason for denial does not make sense or keeps changing, these are red flags to move forward with an appeal.
- If requested testing could potentially change the treatment and outcome, make sure to state that in the letter of appeal.
- Ask the primary care physician and other key individuals (therapists, home care companies) to write an appeal letter referring specifically to the insurance company's contract and definition of medical necessity (see Letters of Medical Necessity). Attach to the appeal all initial letters, the denial letter, documentation of phone contacts, and any supporting material (e.g., therapy notes).
If the item is denied again:
- Repeat the above process of information gathering.
- Decide if you would like to request a hearing on the matter.
- Identify resources for legal representation.
Note on Double Jeopardy: Families with both private insurance and Medicaid may get caught in the middle because a private payer refuses to fund an item/service and Medicaid, who would normally fund such an item, refuses to pay because they feel the private insurance should have paid (Medicaid is always the payer of last resort). In the appeal letter to Medicaid the family should state that they would like Medicaid to pay for the service but that they will allow Medicaid to continue to pursue funding from the private payer (also known as "pay and chase").
Depending on the state in which you live, and your specific insurance plan, there are typically three levels of insurance appeals.
You and your health care provider may contact your insurance company and request reconsideration of the denial. Your physician may also request to speak with the medical reviewer of the insurance plan as part of a “peer-to-peer review” of the decision, with a goal to resolve the issue. The purpose of the first level appeal is to prove that your claim or request for preauthorization meets the insurance guidelines and you are requesting reconsideration for coverage.
Second level appeals are typically reviewed by a medical director of your insurance plan who was not involved in the claim decision. The goal of second level appeal is to prove that the request should be accepted within the coverage guidelines. If the medical service is experimental or investigational, there could be another level of appeals.
Most health plans must allow you to file a request for an external review. Independent external reviews are conducted by an independent, third-party reviewer along with a physician who is board-certified in the same specialty as the patient’s physician that is requesting services. The independent review process is administered by either the health insurance carrier or the Insurance Commissioner's Office, depending upon the type of health insurance. Contact your health insurance carrier to learn who administers the independent review process for your health insurance coverage.
The request must be filed within four (4) months after you received the final insurance denial of your claim in writing, and the health plan must allow you to request an expedited external review when the time it would take for a standard review could jeopardize your life, health or functional ability, hospital admission or care, or an admission from the emergency room which you have been discharged.
For a State listing of Insurance Commissioners, go to Patient Advocate Foundation (PAF).