When Your Medical Insurance Company Will Not Pay: 12 Tips

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If you have health insurance, you have no doubt experienced a situation where the company won't pay. They may deny the full amount of a claim, of most of it. Do you have to just accept their refusal to cover your medical claim? No. There are actually things you can do. Here are twelve tips to help.

1. Don’t assume that the first “no” you receive is final.

About 10 percent of all insurance claims are unjustly denied.

At the same time, less than 1 percent of people making insurance claims even question their insurer when their claim is denied. The majority of policyholders who do contest their cases either win their cases or improve their settlements. So, the message is clear: if your claim is denied, you should appeal the decision.

2. Insist on a written explanation.

Most state laws require insurance companies to provide written explanations of claim denials. Failure to comply may constitute an illegal practice by the insurer. Always ask for a written explanation if your claim is denied.

3. Read your policy carefully to determine if the claim was legitimately denied.

Your insurance company may have interpreted a clause in your policy differently from the way you understand it. Respect your sense of fairness and what you expect the policy to cover. If the ruling doesn’t sound fair, there’s a good chance that it isn’t.

At minimum, if a claim is denied, you should contact the insurance company to ask for a thorough explanation of the denial. 

4. Do not accept filing errors as grounds for refusal.

Always follow your insurer’s instruction for filing a claim. But if you fail to fill out a form correctly, or if you miss a deadline for submitting a claim, even if you are months late, your insurance company cannot refuse to pay.

If you have made a valid claim, the company must show it has been harmed by your error or prevented from making an adequate investigation due to your delay. This is a rare situation, and in most cases, the denial or refusal is not legitimate.

5. Do your own research to support your claim.

If your insurance company pays less than you expected for care provided, check what other doctors in your area charge for the same care. If other doctors charge more than you received, challenge the payment.

6. Ask your insurance agent or group policy administrator at work for support.

The agent from whom you purchased your insurance, or your benefits manager at your job, have a duty to make sure the coverage protects your interests. Contact them for support in contesting any claims denials.

7. Contact the insurance company directly.

If your insurance agent or claims administrator doesn't help to resolve your problem within 30 days, telephone the insurance company yourself. Be polite but persistent, and keep going up the corporate ladder. Be sure to make a detailed record of all phone calls, including the names and positions of everyone with whom you speak. Save your phone bills that list the calls. Follow up each call with a brief letter stating your understanding of the conversations, and request a written response within 30 days.

8. Complain in writing if your phone calls don’t work.

Begin with the person who denied your claim, then write to the person’s supervisor. Include your policy number, copies of all relevant forms, bills, and supporting documents and a clear, concise description of the problem. You should request that the insurer responds in writing within three weeks. Keep copies of all the correspondence. Make sure to send letters by registered mail, and keep copies of the receipts. Explain what negative effects the denial of your claim is having. Use a courteous, unemotional tone and avoid rude or blaming statements.

9. Write a follow-up letter.

If you receive no response, send follow-up letters, with your original letter attached to the insurance company’s consumer complaints or customer service department and to the company president. In most states, failure to respond promptly to letters regarding claims is an unfair insurance practice.

10. Enlist outside help.

If necessary, you should enlist outside help to add pressure. Some of the outside resources include: 

  • Your state Department of Insurance. These departments are free. The amount of these departments can help varies from state to state. Some states with strong departments, California, New York, and Illinois for example, will mediate your dispute.
  • A professional arbitrator
  • A lawyer

11. Gain doctors’ support.

If you can enlist your doctors’ support for your claim, you have a better chance of successfully challenging a claim.

12. Look for violations.

If your claim is denied because of a reduction in coverage, determine if you were ever notified about that reduction in coverage. If you were not, then you have a good chance of winning your claim since failure to notify the patient of a reduction in coverage is a violation of the law.

A Word from Verywell 

There are other resources that can help you with information and support in helping to get the health care coverage and reimbursements you deserve. You can contact these groups for more assistance. 

Consumer Coalition for Quality Health Care
1275 K St. NW, Ste. 602
Washington, DC 20005
Phone: 202-789-3606
Website: http://www.consumers.org

Consumers for Quality Care
1750 Ocean Park Ave., Ste. 200
Santa Monica, CA 90405
Phone: 310-392-0522
Website: http://www.consumerwatchdog.org

You may also want to read the book Fight Back & Win – How to Get Your HMO and Health Insurance to Pay Up, by William M. Shernoff, for additional information.

Sources:

Lankford, Kimberly. "How to Get Insurance Companies to Pay Your Claims"  Kiplinger Reports. April 30, 2012. 

Avitzur, Orly. "6 Ways to Avoid Having a Health Insurance Claim Denied." Consumer Reports. December 2014.

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