Health Insurance: How to Fight Back Against 4 Common Claim Denials

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Denials of medical claims are all too frequent. Roughly 14% of all claims are denied every year, according to Department of Labor records. Not only that, but almost 10% of claims processed by insurance companies contain errors. Your claim could have been denied because it was coded as a different procedure than what you received from the doctor!

There is a silver lining in the clouds of denial or error, however. You can always appeal a health care claim denial. Patients who appeal win about 50% of the time. Not only that, but the more familiar with health care claims you become, the more you will learn about what's covered — and what is not.

The passage of the Affordable Care Act (ACA) increased rights to appeal, whether you are covered under ACA or not. Think of it this way: You or your employer, or both, are already paying a hefty price for health care. Appealing your denial and knowing how to determine errors is part of getting what you and your company have already paid for.

Before You Appeal: Know the Codes and How to Appeal

Any appeal to a health insurance company has to contain some basic knowledge of the information they provide you, as well as your rights.

After a visit to a physician's office or a procedure, you will receive a form called an Explanation of Benefits (EOB) from the insurance company. An EOB arrives for all claims, approved or denied. It details what was charged, what the insurance company paid, and sometimes a remainder of what the patient is responsible for.

If a claim was denied, it will receive a code. Most insurance companies provide a key to the code. (Check the back of the form.) If it does not, call and ask the insurance company what the code means.

The Four Most Commonly Denied Claims

At times, knowing the code will immediately help you appeal a denial. Sometimes the denial is the result of sheer error. Here are the four most commonly denied claims.

1. Your Plan Does Not Cover the Procedure

If the code indicates that the denial occurred because the plan did not cover the procedure, check your plan to see if it is, in fact, covered. If you received a vaccination, for example, double check what kinds of services your plan covers. Many plans cover preventive care (care received to prevent disease before it begins, rather than to treat a condition that exists). Vaccinations and flu shots are both examples of preventive care. This type of denial is surprisingly common.

A similar situation can occur with vision claims. You may receive a denial stating that vision care is not covered. However, many policies cover eye care if it is needed medically. People with diabetes, for example, are covered for annual exams because the condition can affect vision, while regular eye exams are not. Plans can cover surgery for cataracts, but not eyeglasses.

Errors of this kind can be appealed fairly easily. If you were denied because of lack of coverage and the procedure was in fact covered, call the health insurance company. Be sure to make note of the name of the person you spoke to, their title, and the date.

2. Errors in Coding

Knowing the code can also help you discover a coding error. You may find that the code for the service doesn't actually match what you visited the doctor for. The procedure or diagnosis code could have been entered incorrectly. You should also check every piece of information, including your name, date of service, place of service, and provider number. If any of these are erroneous, it can result in a denial.

If you find a coding error, call the billing office of the doctor or hospital involved and ask them to resubmit the bill with the correct code. Again, it's vital to get the name of the person, their title, and the date.

3. Payment for a Procedure Was Included in the Allowance for a Related Procedure Performed the Same Day

Patients are not responsible for a charge like this. Call your provider's office and ask for an adjustment to the bill.

4. You've Reached the Maximum Amount of Times a Service Is Covered

Again, the best action is to double check your policy. Is it true that it is only covered a maximum amount of times? If there is a dollar limit, check it against what you received. Contact your insurance company in the case of any errors.

For a denial of this type, check what the provider's discount is as well. Many doctor's offices and suppliers contact an insurance company to set a price for goods and services that is less than the market rate. You could be charged the market rate unless you specifically follow up about the discount. Even if you are denied legitimately for the maximum number of times a service is covered, you are still eligible for the discount the provider offers.

Given the frequency of denials and related errors, it's wise to be on your guard every time a denial is issued. Don't assume the denial is correct! Appeal and follow up on your appeals as needed.

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