Insurance companies make errors, so know the ins and outs of your policy.

Appealing a denied claim is a hassle, but a little determination—and preparedness—goes a long way.(ISTOCKPHOTO)Denied insurance claims—even for care that seems obviously necessary—are, unfortunately, all too common occurrences. If your claim is denied, the first step is to contact your insurance company. While there is always the chance that the denial was an unfortunate and harmless misunderstanding, dont get your hopes up for an easy resolution. People who manage health-insurance claims professionally have a term for the frustration of trying to get help from customer-service lines: 1-800-HELL.

If you cant get your claim covered by talking with your insurance company over the phone, dont assume that the first "no" you receive is final. You have a legal right to appeal the companys decision, and there are resources available to help you. You need to help yourself too, however. "With many major health plans, it is routine to deny coverage on the first submission, so if patients are not willing to move through an appeals process, they will end up paying," says Nancy Davenport-Ennis, the cofounder and CEO of the Patient Advocate Foundation, a nonprofit organization that advocates on behalf of patients whose health-insurance claims have been denied.

Next Page: Preparing an appeal [ pagebreak ]

Insurance companies make errors, so know the ins and outs of your policy.

Insurance companies make errors, so know the ins and outs of your policy.(ISTOCKPHOTO)If you do decide to appeal a denied claim, take action immediately. Your insurer may place time limits—often 30 or 40 days after the denial—on starting the appeals process. You should begin by asking, via certified mail, for a written denial from the company, which will explain the reasons for the denial in detail and help you craft a rebuttal.

Preparing an appeal
The next step is to outline your argument for why your claim should be honored. First, read your policy carefully to determine exactly which treatments are covered and which are not. It is not uncommon for insurance companies to deny coverage for a treatment that is explicitly included under the policy.

"Insurance companies frequently make errors," says Davenport-Ennis. "We did an audit in 2005 of all the cases we had worked on and found that 96% of the claims denied by the plan representative were fully covered benefits. In one case, a woman brought in a box of bills that she had paid when her husband was very, very ill, before he passed away. We audited them and found she had overpaid her hospital by $70,000. The patient was ultimately reimbursed."

During this stage you should enlist your doctor, who may be able to help you write a letter of appeal. Some denied claims, in fact, can be resolved by changing the way they are billed. If your insurer denied a portion of the payment for a colonoscopy, for instance, consult the language in your policy as well as your doctors staff. Colonoscopies may be fully covered by your plan if they are part of a checkup, but only partially covered if they are used for diagnostic purposes. Your doctors billing department may be able to change the bill and resubmit it.

Next Page: Finding Other Help [ pagebreak ]Finding Other Help
If your doctor cant help you resolve a denied claim, there are other resources that can be tapped for assistance. If you receive health insurance from your employer, contact the human resources department and explain your predicament; some companies have a case manager who can help you make your appeal.

The government offers some assistance as well. The insurance departments in many states fund independent ombudsman offices or offer administrative help for citizens who are dealing with difficult claims. At the federal level, the U.S. Department of Labors Employee Benefits Security Administration has a staff of benefit advisors who can help you understand or obtain your benefits.

Nonprofit organizations are yet another option. In 1996, Davenport-Ennis started the Patient Advocate Foundation after she and her husband raised more than $200,000 to pay the medical bills of a close friend with breast cancer whose insurance company refused to fully cover her expensive course of treatment. (The friend ultimately lost her life to the disease.) Since then, the foundation has helped more than 21 million chronically ill people wrestle with their insurance companies or, if they are uninsured, search for free or affordable treatment programs. "We serve as an active liaison between the patient and his or her insurer, employer, and/or creditors," says Davenport-Ennis. Cancer patients (who were originally the focus of the organization) make up about 60% of its clientele, but the foundation now offers its services to those struggling with any long-term medical condition, including stroke and arthritis. "They are very, very good at calling insurance companies and negotiating," says Otis Brawley, MD, chief medical officer of the American Cancer Society.

Navigating the appeals process
One of the most valuable aspects of these potential advocates is that they can help you translate your argument into the language spoken by insurance companies. The emotion and stress that patients with serious illnesses (and their families) experience when faced with a denied claim is often counterproductive when channeled into an appeal.

Shauna Hatfield, a case manager at the Patient Advocate Foundation, tells the story of a North Carolina man who was mid-surgery, having half his cancerous liver removed, when his health insurer called the operating room and declared that it would not preauthorize the surgery. The surgeon was so furious—"Tell them Im not putting the cancerous tissue back into the patient!" he sputtered—that he put together a 120-plus-page appeal letter on the mans behalf. Two weeks later, the insurance company issued a verdict: Denied. "The patient submitted a very, very emotional letter—'Oh, my God, Im dying and I dont have money to pay for this,'" says Hatfield. "We were unemotional. We looked at it as a contract issue only. We wrote a concise 29-page appeal arguing that the treatment was standard procedure for the condition." The claim was paid.

Next Page: Stay organized [ pagebreak ]When appealing a denied claim, it is important to remain as calm, cool, and collected as you possibly can. As you navigate the appeals process, these tips will help you stay focused and maximize your chances of success:

  • Stay organized. Keep every scrap of paper that relates to your case and have everything at your fingertips whenever you contact the insurance company. "That way you can say, line by line, 'This is what happened, this is the date, this is what I had done, this is what I was told,'" says Karie Waddell Gallo, a senior account manager at Saxon Financial Consulting of Cincinnati, Ohio, which specializes in health-insurance claims. By the same token, keep detailed notes during the conversation and write down the date and outcome of each phone call, so that you have a record you can refer back to. Knowing your policy inside and out will help you present your case well, which will force the insurer to take you seriously. If youre not sure of your facts or dates surrounding your procedures and have to scrounge around for your records, you could end up wasting a call.
  • Collect names and numbers. Each time you call an insurance company representative, immediately ask for the persons name and extension. Try to deal with the same agent each time, so you dont have to repeat your whole story over and over. Ask for a reference code for your claim, so if you do have to start with a new person, he or she can access the record of prior phone conversations.
  • Ask for a specific timeline. The review process for an insurance claim usually takes three to four business days. If its a major claim (more than $10,000), it may go through an additional review process with an underwriter, which can take up to 30 days, according to Gallo. Follow up with the same agent at the end of the allotted time.
  • Go up the food chain. If you dont get the result you want from the person who answers your call, dont stop there. Ask to speak to someone higher up, whether its a supervisor or underwriter or the president of the company. And be persistent. "Most people only talk to the agents who sell and service the policy. Above them are the underwriters who make decisions on risk. And then there are the medical directors, the MDs who make assessments of individuals and groups," says Stewart Perry, chairman of the board of the American Diabetes Association.

Dont give up
Even in the face of repeated denials, determination tends to produce the best results. "In my experience, if people are asking for reasonable treatments for evidence-based medicine, the insurance company is very likely to pay if people persevere," says Dr. Brawley. "Often, if the insurance company says no, its either because they didnt understand the situation or the insurance company thought the treatment was unproven."
Perry cites the case of an Ohio woman who went to battle with her insurance company when it refused to cover diabetes testing supplies for her daughter. She took her case all the way to the president of the company—who, as it turned out, also had a daughter with diabetes. "He said, 'What do you mean we dont cover that?'" Perry recalls. In the end, the womans claim was covered.