When a child experiences an unexpected illness or accident, the last thing on a parent's mind is worrying about the cost, especially if you have insurance. Yet as you might have found out, the unfortunate reality is that about one in every seven health insurance claims are denied by insurers for various reasons. This amounts to around 200 million rejected claims annually.
Since medical debt is a leading cause of bankruptcy filings (it was responsible for a staggering 62% of personal bankruptcy filings in 2007), it needn't be a child's rejected claim to cause trouble. A rejected claim can create turmoil for the entire family; wreaking financial havoc that impacts everyone, including the children. Yet an insurance company’s rejection does not necessarily mean hope is lost.
Why claims are rejected
There are many reasons why a claim might be rejected, ranging from a simple paperwork error to the insurer ruling that a certain procedure isn't medically necessary. Of course, there is also often a more sinister side to claim rejection: the insurance company makes more profit when you pay them but they don't have to payout to you. It's widely believed that insurance companies reject claims merely to reject them, counting on the fact that most people won't put up with the hassle of challenging the denial (can't we just get a triple root canal instead?) and go ahead and pay the claim out of their own pocket. Indeed, some estimates are that 96% of people simply walk away after a denial without appealing.
Patient advocates say they are seeing more and more denials from insurance companies, and that those denials are becoming more dubious and aggressive, with companies denying claims that would not have been challenged in the past. "Don't accept the insurance company's word as final," says Kevin Lembo, a Connecticut health care advocate, in a December 2009 AARP Magazine article. "It is not, nor should it be." Instead, families should take the following steps when a claim is denied:
1. Do not pay the bill. Paying might as well be an admission that you agree with the company. Some dubious representatives will tell you to go ahead and pay the bill and then appeal, and that you'll be refunded if you win the appeal later. Don't fall for it. Your paying the bill makes the issue a closed case as far as both the health provider and insurance company is concerned. Leaving payment in limbo works to your advantage.
2. Get a reason for the denial in writing, before you attempt an appeal. Just like a lawyer or prosecutor wants their opposition talking so they can peg them to a statement, you want to get an official explanation in writing that will pin them to a specific excuse for the denial. Once you have this, you can then begin working your angles on appeal.
3. Review your plan's rules and prepare a challenge. Look first for any easy fixes, such as filling out missing information. There also could be coding errors on the form. If this is the case, have your doctor fix it.
Appealing the Decision
Some things are harder to appeal than others. Among the more difficult decisions to win are...