When Your Health Insurance Plan Won't Pay

The very nature of managed care health insurance plans increasesthe likelihood of a legitimate health insurance claim beingdenied. Bear in mind that managed care (health maintenanceorganizations, or HMOs, and preferred provider organziations, orPPOs) exist for the purpose of controlling costs for the healthinsurance company. Many health care procedures, surgeries,durable medical equipment and drugs, particularly the moreexpensive ones, require prior authorization from the healthinsurance plan before the plan will pay. Claims are reviewed todetermine "medical necessity" of the claim. Health care servicesor products deemed "not medically necessary" will almostcertainly be denied for payment by the health insurance plan. Health insurance companies do make mistakes, however, and it'scertainly possible that a covered expense will be denied. Whatrecourse does the health plan member have when one disagreeswith the decision of the health plan? Here are some steps totake in dealing with a denial of payment.1. Review the explanation of benefits (EOB) sent to you from thehealth insurance company. The EOB should show the servicesand/or goods billed and state briefly why benefits were denied. 2. Review your health insurance policy. What benefits does thehealth insurance policy state for the particular service orproduct? Should the claim be covered according to the policy?3. Does the health plan have special criteria to be met in orderfor an expense to qualify as "medically necessary" and beconsidered a covered expense? For example, many managed careplans will cover drugs on their formulary. Other drugs may notbe covered at all, or may be covered only if the formulary drugshave been tried and failed. An expensive MRI procedure may onlybe covered if certain symptoms are present. Check your policy todetermine whether the expense qualifies as "medically necessary"by the health insurance company.4. Is the health care provider "in-network" (contracted) withyour health insurance plan? If not, does your managed care plancover "out-of-network" (non-contracted) providers? Most HMOplans do not cover "out-of-network" providers; many PPOs willpay for services by "out-of-network" providers, but usually atat lower rate than paid to "in-network" providers.If, after reviewing the health insurance policy and the EOB, youfeel that the claim should have been a covered benefit by theinsurance company, you should first request that the insurancecompany provide you with the information that they used to basetheir denial. The health insurance company is required toprovide you with this information on request. Review thisinformation carefully. Many times the health insurance companywas not provided with appropriate documentation from theprovider to justify the claim. Contact the provider and requestthat they submit more medical records that support the claim forbenefits. It may also be helpful for the provider to write aletter to support the claim in addition to the medical records.Your claim may be resolved in this manner.All insurance companies have a process in place for plan membersto appeal decisions made by the health insurance company. Ifproviding further documentation does not resolve the dispute,then an appeal must be filed with the health insurance company.Your provider may help you with this, and they may not. Read themember handbook and/or policy and follow the procedure forappealing the denial of the claim. Be prepared to submit moredocumentation to support your appeal. Keeping a record of yourinteractions with the insurance company is vital. Record allphone conversations and include the name of the person you spokewith, a brief summary of the conversation, and the date andtime. File all correspondence sent and received and keep itaccessible.Bottom line is that health insurance plans are "for-profit"entities; in business to make money. They look for reasons notto pay. Indeed, their goal is to not pay, increasing theirprofits and keeping costs down for the members. It's up to youto ensure that legitimate claims for covered benefits are paid.