Why Does My Health Insurer Deny the Care My Doctor Recommends?

Steps to Take If Your Insurer Denies Coverage

A health insurance form.
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More and more, health payers are insisting that patients obtain permission before undergoing a medical test or treatment. And, after review, they may decide not to cover that treatment at all. With the high premiums many people pay, this can be very disconcerting. Why do payers sometimes deny coverage of physician recommended treatment, and what can you do if this occurs? What are the alternatives?

Roots of Insurer Denials of Care

There are few frustrations that rival being turned down for coverage after a physician has made a specific recommendation for a therapy to improve your medical condition. This isn't an isolated concern and may occur whether you have private insurance or are covered under a government system such as Medicare or Medicaid. Once you finally feel like you have an answer and/or a solution to a problem, these denials can feel devastating.

Why does this happen?

Like many of the other mysteries of medical care that relate to the cost of care, the primary answer to this question is, "follow the money."

Denial of care is a form of healthcare rationing. You might think of it this way: The insurer or payer hopes to take in far more money than they pay out. That means that each time you need a test or treatment, they will make an assessment about whether it is the most cost-effective way to diagnose or treat you successfully.

If you need a treatment or test, and it isn't considered part of the standard of care for your medical problem, then they may have a reason to save their money by denying that test or treatment for you.

What payers know is that among the triangle of health care (you, your doctor, and your payer) everyone's goals are different.

You just want to get well. Your insurer wants to make money. Your doctor wants both, though what that means can vary based on the practice. Some physicians may choose a test or procedure which will increase her income, or instead, lean away from a test or treatment for which she may be penalized.  With payers, making the most money doesn't always mean denying tests. Conditions which aren't properly treated may cost them much more in the long run.

While these differences in motivation may be frustrating for patients, it isn't necessarily bad if other equally effective treatments or tests are available. The less money the payer spends, the less we eventually pay in premiums.

Denials When There Is No Alternative Test or Treatment

Denials can be particularly challenging when there is no alternative treatment that is covered. Examples in which there may be no alternative include:

  • A rare disease, requiring an expensive drug, surgery, or another form of treatment.
  • A new form of healthcare technology.
  • Off-label drugs (drugs prescribed for a treatment other than that for which they are approved).
  • Compassionate drug use medications (investigational drugs not yet approved, but which may be the best option).

What Can You Do If You Are Denied Care By a Payer?

If you are denied coverage for a payer, don't panic. A denial doesn't mean that your payer will absolutely not cover a test or procedure. There are many nuances in medicine and no two people are alike. Sometimes a payer simply needs to be educated as to why a particular test or therapy will be most beneficial for a particular person.

Before taking any of the next steps make a few calls. It's not uncommon for a test or procedure to be denied simply because it is not coded correctly. Many infuriating denials only require a phone call clarifying the condition and indication.

Again, before calling make sure that the treatment you wish to have covered isn't explicitly excluded from your plan. For example, even if you have an acceptable indication, insurers won't likely pay for medical marijuana. In a case such as this, your insurance won't pay no matter what condition you have or symptoms you are coping with.

If you are denied care by your payer, there are a few things you can do.

  1. Fight the denial. Sometimes all that's required is to get in touch with your payer's customer service. Ask why you were denied, and what evidence they would need to reverse the decision. Then work diligently to change their minds.
  2. Ask your doctor what alternative may exist. This should probably be done at the same time as fighting the denial since it's possible your insurer will tell you there is an alternative. Having this information will help you continue your fight, or will give you some peace of mind that plan A is not your only option.
  3. Pay cash for the service. It's easy to forget that you can still have a test or procedure that your insurance denies if you choose to pay the expense yourself. If you decide to move forward with this plan, be sure to negotiate the pricing with your doctor. Often doctors who accept cash (not all do) will reduce their fees when they know a person must pay out-of-pocket.
  4. Don't pursue the test or treatment. This option is a distant fourth. This option is basically only acceptable if you don't really believe you need the test or treatment. In which case you wouldn't be asking this question!

Other tips that might help this process go smoother include:

  • Keep careful records. Write down dates, times, and names of anyone you speak with at your insurance company. Request that any recommendations or changes be confirmed in writing, preferably via email so it carries a stamp for time and date. In other words, create a paper trail.
  • Read through your benefit plan carefully. Be prepared to give reasons which support the requirements of your plan. You will probably feel frustrated by having to tell your insurance company what is written in their plan, but it's not uncommon to have to do so.

Bottom Line If Your Health Insurance Denies Coverage

Health insurance denials can be terribly frustrating when you are the patient. Even more so when your doctor believes you should have a particular test or treatment. It's easy to become angry and want to scream!

Instead, it's often best to think carefully through your options. As a first step, talk to your doctor about alternatives that are covered. Knowing these options you can then objectify your situation by listing out pros and cons for both the covered and non-covered treatments. Every person is different and there may be clear indications why one treatment is better (either in efficacy or side effects) than another based on your particular medical situation. Many doctors will "go to bat" for you if this is the case.

If it honestly appears that the non-covered test or treatment would be better for you, don't give up. Fight the denial. As you do this keep in mind that insurers are looking at numbers when making decisions, and people aren't statistics. Your insurer has only limited information when reviewing your request, and sometimes simply needs a little more "education" into your condition and personal medical history to recognize the need for the desired treatment.

Even if your insurer ultimately denies your treatment (after you fight the denial) keep in mind that they are not the ultimate authority on your health. Though it may be a major expense, the option to self-pay still remains. If you don't have the money in your checking account, as most people do not, consider ways to fund the treatment such as taking out another mortgage, borrowing from friends and family, using Go Fund Me pages on Facebook, having a fundraiser and much more. If you go this route, remember that medical expenses you pay for out of pocket are often tax-deductible, and in a situation such as this, often add up to give significant relief.

Sources:

Gilmore, A. The Complexity an Value of Mid-Level Patterns of Denials. Healthcare Financial Management. 2016. 70(4):80-5.

Healthcare.gov. How to Appeal and Insurance Company Decision. https://www.healthcare.gov/appeal-insurance-company-decision/appeals/