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What Happens When My Medical Claim is Denied?

Needing medical care can be stressful and overwhelming. For many of us, that burden is somewhat lifted because we have health insurance. But what if your insurance company denies your medical claim? Are you stuck with the bill, or can you appeal? Let’s find out…

Here are the top 3 most common reasons a medical claim is denied:

  1. Your service or treatment is considered a “non-covered service.”
  2. You didn’t get the appropriate pre-approvals prior to receiving treatment.
  3. Your service was considered “not medically necessary.”

 

Today, let’s look at each of the 3 most common denial reasons and see what to do if this happens to you. For a more comprehensive list, check out the bottom of this blog.*

1. Your Service Is a Non-Covered Service

Sometimes, your service is considered non-covered. That means when your employer and health insurer decide how much healthcare to cover, this didn’t make the list. That means they expect you to pay for this service yourself and it is not part of your health benefits. However, there are always exceptions.

Example 1: Sandra was diagnosed with breast cancer and had to undergo chemo and lost her hair. She had a high-profile job where her appearance was important and going to work bald was considered disruptive. Ordinarily the insurance company would not cover a wig, but in this case they felt it was necessary for her to continue working. The insurance company decided to make an exception and cover the wig for Sandra. The wig was called a “cranial prosthetic.”

Example 2: Normally cosmetic plastic surgery is not covered by health insurance. However, Jim was in a fire and suffered severe damage to his face and hands. The insurance company may consider covering plastic surgery in his case because it is not for cosmetic reasons.

What to do if this happens to you?
If you get your Explanation of Benefits or a bill from the doctor saying your service was denied as a  non-covered service, first call your insurance company’s customer service number.

Make sure you get enough information from them to understand their opinion and why they made this determination.. If you still believe your treatment should have been covered, you can file an appeal.  Check your insurer’s website to find out how their appeals process works.

If you do end up having to pay cash, always ask for a discount from the provider.

2. You Didn’t Get the Appropriate Pre-Approvals

Many insurance companies will require a pre-certification, pre-authorization, or a referral to a specialist before you receive care. If you don’t get the appropriate pre-approvals, the insurance company can deny your claim. Most of the time, the provider you are visiting will obtain the prior approvals for you.  Be sure to check with your insurer before receiving care.

Example: Sujatha fell and hurt her knee.  She has a friend who is a physical therapist, so Sujatha made an appointment to see her friend at her clinic.  When she got to the clinic, she was asked to pay cash for the visit.  After she received her bill, Sujatha submitted it to her insurer for reimbursement.  The claim was denied.  She needed both a doctor’s order and a per-certification specifying the number of approved visits.

What to do if this happens to you?
If you didn’t get the appropriate pre-approvals, you can still try to appeal. First call the customer service number for your insurance company and talk to the agent. Ask them if there is any way you can get these claims paid for if you get a referral now.

If the insurance company says they won’t pay, follow their official process to appeal. Once you submit your appeal, it will be reviewed and either approved or denied.

3. Your Service Was Considered Not Medically Necessary

Your insurance company reviews claims and determines whether or not they are medically necessary. That means, does your treatment fall within normal and usual course of action for your illness. If your insurance company believes your treatment is outside the usual course of treatment, it may deny the service.

Example: Tom’s doctor prescribed Lipitor instead of a low-cost generic medication. His insurance company denied coverage because a less-expensive drug was available. Generic drugs are just as safe and effective at treating his condition, so the insurance company denied his medication.

In Tom’s case though, he has a bad reaction to an inactive ingredient (an ingredient like a binder that keeps the pill together) in the generic version of Lipitor. That’s why his doctor needed to prescribe the brand-name drug.

What to do if this happens to you?
This one may be the “easiest” of the three to get fixed. If your doctor prescribed a medication or ordered a procedure, he thought it was medically necessary.

Again, call your insurance company and find out what information they need to get this claim covered. They may ask your doctor to fill out and send in a Medical Necessity form.

Contact your provider and tell them your service was denied because it was not considered medically necessary. Then give them the information they need to help you out. Most physicians will help you as a normal part of their practice.

Medicare Corner

Traditional (Original) Medicare
Medicare works a little bit differently. If a Medicare claim was denied, follow the steps to file a traditional Medicare appeal. There are 5 levels of Medicare appeals. If you disagree with the outcome of a certain level, you can generally go to the next appeal level.

Medicare Advantage
If you have a Medicare Advantage (Managed Medicare) plan, the appeals process is slightly different than  traditional (original) Medicare. If you’d like to file an appeal, follow these steps to file a Medicare Advantage appeal.

So, if your medical claim is denied, you still have options. But the bottom line is, step outside the rules, and you could pay more.

 

*An insurance company can deny a medical claim for a number of reasons not listed above. Here are a few other reasons your medical claim could be denied:

  • Your procedure is considered experimental (not covered by the FDA).
  • Your doctor’s office may have incorrect insurance information on file for you, so the insurance denied your claim due to an administrative error.
  • If you changed insurance policies in the middle of a medical procedure, that could lead to a denial.
  • Coordination of benefits, meaning another insurance company  was responsible for your bill (called the primary insurer) and should have been billed first.

Comments

  1. Sai | 7 October 2013 at 7:07 am

    Hi,
    Thank you for the details on this page https://www.hoopayz.com/health-insurance/what-happens-when-my-medical-claim-is-denied.

    Can you please suggest on my issue below?

    ->Wife went to a dentist and he suggetsed treatment that involves 4 sittings with doctor spanning a month.
    –> Doctor’s office called my insurance and then they told me i have to pay $117 and rest is covered by insurance for all 4 sittings.

    –> we chose to go ahead with doctor suggested treatment after seeing it is not expensive as it sums out to be $117.

    –> after 6 months, Now i received letter from Doctor’s office saying the claim was rejected twice by my insurance saying its “not medically necessary” even after resubmitting supported documents.

    –> Now, As it is rejected, Doctor’s office now asks me to pay the balance as insurance did not cover it.

    Do i owe it?

    Please help

    • HooPayz | 7 October 2013 at 6:39 pm

      Thanks for your question. Hopefully, we can help.

      Did you sign anything at the dentist’s office saying you will pay for all services not covered by insurance?

      Did the dentist give you anything in writing, such as the estimate they quoted?

      Here are your options:
      1. Ask the dentist to appeal through the 3 levels available
      2. If it is still denied after appeal, tell the dentist you will pay for 50% of it because they told you it was covered. They should write-off the other 50%.
      3. If they refuse, try to negotiate a discount (up to 30%)
      4. If that doesn’t work, you can refuse to pay but they might send you to a collections agency and then disclose to the credit reporting agencies. It could affect your FICO score.
      5. You can also tell the dentist that, in the event you can’t resolve this amicably, you will put out a bad review on every social media site you can find.
      6. DON’T use this dentist ever again.

  2. Robyn | 28 July 2014 at 8:04 am

    My daughter had 4 impacted wisdom teeth. Oral surgeon office and myself called insurance and got preauthorization saying they would pay after $1200 ded. Now 5 months later I am getting bill and insurance has denied . Shouldn’t they pay this ? We probably would not have done it right now if had to pay whole thing. Our bill is for another $1464.00

    • HooPayz | 28 July 2014 at 8:44 am

      Hi Robyn,

      What is the denial reason the insurance company has listed?

  3. Gaby Martinez | 7 November 2014 at 12:12 pm

    Please help, I have 3 wisdom teeth coming in , all impacted. My top left wisdom tooth is growing the fastest and I can’t even open my jaw comfortably and it is very painful. My insurance has denied me and my dentist denied my request at new X-rays. The last time I took my X-rays were over 6months ago, and they refuse to let me get new ones done , my teeth have came in a lot since then. I have Healthy Families

    • HooPayz | 10 November 2014 at 6:06 am

      Hi Gaby,

      Thank you for your question.

      Depending on the details of your insurance, you may only be covered for one set of X-rays per year. If that is the case, you may have to pay out-of-pocket for that second set of X-rays. You can check the details of your benefits on your insurance company’s website.

      You can also try to appeal with your insurance. If you decide to try this, your dentist must agree to the appeal. Research your insurance’s official process to appeal on their website or call their customer service phone number.

      Finally, if your dentist is unwilling to work with you, you can switch to another provider. Just make sure that the new dentist is within your health insurance network.

  4. Ashlyn Stofan | 19 March 2015 at 1:34 pm

    I have a patient that her insurance said they will cover her procedure 100% with a copay. Her procedure was done and 12 months later, the insurance denied the claim. The medical office had the pt pay $1500 (the allowable amount). The denied claim was appealed and the appeal was denied. The insurance deemed the procedure not medically necessary for the patient and the office was “told to write-off the amount and give the money back to the patient”. Why would the money be given back to the patient if the insurance company said the procedure wasn’t medically necessary?

    • hoopayz | 2 April 2015 at 12:46 pm

      Ashlyn,
      Thank you for your question. In some cases, by claiming that the procedure was not “medically necessary”, the insurance company does not allow for the balance to be billed. Restrictions on balance billing depend on a variety of factors like state legislation, type of managed care plan, procedure or test, etc.

      That means that the provider doesn’t receive payment and the patient is under no obligation to pay the medical bill’s balance. So in this case, because the patient already paid, the insurance company requires a refund.

      For more specific information, inquire with your patient’s insurance provider.

      We hope this helps!

  5. Mary Hoffman | 17 September 2015 at 2:22 pm

    I am a state employee and have Blue Cross Blue Shield Horizon. I was diagnosed with High Blood Pressure, Thyroid Problems 15 years ago and have been taking medicine for all those years. I decided to go to a functional medicine doctor who took many different tests and has helped me through supplements and organic food to cure my ailments. Her consultation fee is $300 per month for 6 months. She is also a Doctor of Chriopracty. Because her id number specified chriproacter and not functional medicine, they will not pay, even out of network. Can you help me find a proper answer to this complaint. Thanks very much.

    • hoopayz | 18 September 2015 at 3:03 pm

      Hi Mary, Thank you for your question. While you may have little to no wiggle room according to the specific details and scope of coverage of your health plan, you do have a few options moving forward.

      You can request a letter of medical necessity from your Doctor. Your Doctor should send this to your insurance provider.

      You can also submit an appeal with your insurance company to revisit the charges you’ve accumulated (the instructions for the appeal process are usually found online).

      Also, be sure to talk to your HR department about an “alternative therapy” benefit. There might be an option better than your current health plan and more suited to your needs

  6. Christine | 21 October 2015 at 5:09 pm

    I had a hysterectomy. Hospital got pre-approval as did my doctor. There was a “surgical assistant” who was a part of my procedure who apparently did not get pre-approval and now tells me they are out of network but that I don’t get to choose who is the surgical assistant. Their claim has been denied by my insurance company. Am I responsible for their bill? I am in CO.

    • hoopayz | 5 November 2015 at 2:00 pm

      Hello Christine, Unfortunately we’re very familiar with this type of scenario. While the hospital may be in-network, not all providers are. It’s very difficult to anticipate everyone contributing to your care and verifying their network beforehand. We are unable to fully answer this question because it is unclear who the “surgical assistant” is. If you’re referring to a a clinical employee of the hospital, you should not be receiving a separate bill for their work.If however the “surgical assistant” is a physician, a second physician assisted in your operation, then yes they can bill.

      While your insurance company will not contribute to the costs of a second, out-of-network physician, you can try and get a discount by dealing with the billing department directly. At the end of the day, doctors want to get paid. For this reason, you may be able to negotiate your bill down if you can pay the bill immediately. Or, some billing departments will work with you to set up payment plans. It’s worth exploring all your options.

      If you would like to have your bills reviewed, we do offer individual HooPayz members. For more information about our services, please email us directly at contact@hoopayz.com

  7. Patrick Lorrigan | 18 November 2015 at 11:39 am

    I had a medical claim denied and I appealed it and it was once again denied. the doctor also appealed it twice and they were both denied. doctor ordered an Echo w/ Doppler and color flow after Angioplasty and Stenting were performed. and they say it was not medically necessary because the left ventricular function is available from the ventriculogram that was previously performed. what can I do now. what is my responsibility on this charge. and what is the doctors responsibility?

    • hoopayz | 24 November 2015 at 8:20 am

      Hi Patrick, Thank you for your question. Unfortunately, without looking at the specific details of your benefits, we’re unable to answer your question. If you would like us to take a look, we do offer HooPayz Membership options. Please write to us at contact@hoopayz.com for more information.

  8. J. Jones | 7 April 2016 at 6:49 am

    I called an oral surgeon’s office to ask what the out of pocket cost for a tmj evaluation was. They told me that they would call my insurance company first to check my coverage. The provider called me back and said that the evaluation would be covered as a specialist visit at my specialist copay rate and that any other treatment for tmj would not be covered as it is not covered under my plan. They gave me the reference number and name of the insurance representative for that call for my records. After the service had been performed, I received a benefits notice that the procedure was not covered by my plan. Now the oral surgeon’s office is billing me full price for the procedure. What steps should I take here since A.) the insurance company claimed they would cover (we have case number proof of this) and B.) the provider accepted my copay and told me that the procedure was covered.

    • hoopayz | 24 April 2016 at 12:52 pm

      Hi J. Jones, Thank you for your question. Your next step would be to follow your insurer’s process to appeal. The specifics of this process can be found on your health insurance company’s website. Be sure to include as much specific information as possible, including the reference number and name of the representative on your appeal. To determine the reason for the denial, consult your EOB (Explanation of Benefits.)

  9. Martin | 25 May 2016 at 8:08 am

    Hi,
    I’m an international student and have a health insurance with a private company my college has an agreement with. Last year I had a small surgery, it didn’t take more than 15 min and not required anesthesia. I had it because the doctor told me it would be the solution to my problem. I am new to all this private health insurance thing (I come from a country with universal heath care), so I had no idea I needed a preauthorization from my insurer. This is specified in the contract, but I didn’t know it by heart and no one told me yo do so. When I arrived to the hospital, I had to fill in a lot of documents and show my insurance card. I assumed they were calling my insurer (this had happened in the past with other medical services). However, 6 months later I received a letter from the hospital claiming a payment of 3000$! (which as a student I do not have). I went to speak with a student representative and they said I shouldn’t worry, that I just had to go talk with them and everything would be fine. I did so. I wrote a letter to the claims department explaining them that I was never informed about the need to request a preauthorization, that I was sorry and claimed their comprehension. Yet a few weeks later I received a letter saying that they refused my claim and that I was responsible for the payment. I have no idea about what to do now. The hospital is claiming the payment (sent a second letter) As I said, I can’t pay this. I would really appreciate your advice here. By the way, I’m in Canada. Thanks

    • hoopayz | 25 May 2016 at 9:36 am

      Hi Martin, Thank you for your question. Since the preauthorization requirement is outlined by the terms of your health plan, there is not much you can do to have these charges dismissed. You can call your health plan and request a “retro-authorization” but depending on your insurer’s policies, they may or may not agree to grant one.
      If this is unsuccessful, the next step is to tackle payment. There are a few steps you can follow. 1. Call the hospital and ask for a financial assistance application 2. Contact the provider and ask for a discount on your bill 3. Set up a payment plan to break the bill up into more manageable chunks

      We have another blog that discusses some details of payment here.

  10. Maddie | 8 June 2016 at 3:13 pm

    I had a mastectomy on 10/1/15. I paid my deductible $1500 prior to the surgery. I was admitted to the hospital and stayed two nights. I logged in to my health insurance portal to check my claims a month or so later. I saw that my hospital stay was paid the allowed amount, but, I was responsible for an additional $52k. I called my insurance company and they said that they really could not tell my why,but, that it appeared I had some sort of investigative or uncovered procedures done and that they would not be covered–but, that they could not tell my what or why. After I freaked out, I calmly called the hospital and was connected with the head of accounting. The gentleman that I spoke with read off the claim just as I saw it on the internet from my insurance provider, but, said that there was no additional monies owed. He said that they have a contract with BCBS and that they paid the allowed amount which was accepted and that I would not receive a bill as I owed $0. I had a second surgery on 12/28/15. I received a bill in March from that surgery for $316. Once again, my insurance company has no idea why or what. I again called the hospital, this time speaking to someone else in accounting/billing. She pulled up my invoice and told my although she is not sure what exactly the medicine was that the hospital administered-she could see that it was denied and uncovered and that I would be responsible for it. I paid it immediately. I figured that I would handle it later.

    A few days ago, I received a bill from the hospital for $14+K for the first surgery. I nearly fell over. The hospital has since changed names if this information is relevant. I called the number on the bill. It was a billing company. They could tell me nothing about what the bill is for or why I owe it, but, that they would send it in for review. I explain that I have already spoken to the hospital and that this claim is paid and I was told I owed nothing. She could care less. I asked for my invoice and I am still awaiting it. I then make the waste of time phone call to BCBS. Once again, they know nothing. They have no idea what they didn’t cover, but, it looks to them like I still am responsible for the $52k. I try to call the hospital MANY times to speak to the in-house accounting (like I had months prior) and am refused only to continuously be transferred to the billing company.

    I am at a loss. Nobody had information. No one can help. I do not know what to do.

    • Brittney | 17 October 2016 at 12:55 pm

      Hello Maddie, Thank you for your question. Unfortunately, without referencing your EOBs and detailed medical bills, we are unable to answer this question here. If you would like more information about a HooPayz membership and the services we provide, you can call our offices at (314) 492-4000.

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