Claim Denials and Appeals

The challenging aspects of claim denials and appeals. You’ll learn how to identify common reasons for claim denials and explore strategies for correcting and resubmitting claims. We’ll also discuss the appeals process when initial claims are denied. By the end of this guide, you’ll be well-equipped to handle claim denials and navigate the appeals process effectively.

Key Takeaways

• You can’t mount a strong appeal if you don’t know why your claim was denied.
• An effective appeal letter contains a clear opening statement, an explanation of your medical condition, and supporting data from your physician.
• It may not be worth the effort of writing an appeal if your claim was denied because it clearly did not fall within what your policy covers.

Denied Claims vs. Rejected Claims

A health insurance claim denial occurs when an insurance company does not approve payment for a specific claim. The health insurer decides not to pay for a procedure, test, or prescription.

A rejected claim can be easy to correct. This is a claim that’s not processed because incorrect information has been submitted with the health insurance claim form. Rejected claims don’t have to be appealed. You can simply correct the error. Resubmit the right information and your insurance company should begin to process the claim.

5 Reasons Why a Health Insurance Claim Could Be Denied

Knowing why your health insurance claim was denied is key because it tells you whether you can appeal the decision.1 If your appeal succeeds, the company must pay for the claim even though it was denied at first.

Health insurance claims are denied for five common reasons:

• There may be incomplete or missing information in the submitted claim documents, or there could be medical billing errors.
• Your health insurance plan might not cover what you’re claiming, or the procedure might not be deemed medically necessary.
• You may have maxed out the coverage limits in your plan.
• The drug or therapy is off-formulary and not part of your health plan.
• You may have used out-of-network services or used your health insurance out of state when your health plan requires “in-network” providers.