If your health insurance company denies your claim, don’t panic. You can take several steps to respond. First, find out why the claim was denied and whether it was a mistake. Your insurance company should provide an explanation in writing, so read it thoroughly to find answers.
If you feel your claim was denied in error, you have a right to go through the appeals process. If you appeal and your health insurer still denies your claim, you may still have other options. Here’s what you need to know about appealing a claim that your health insurance company has denied.
What to do when your insurance company denies your claim
After you file a health insurance claim, the majority of health insurance plans are legally required to send you a written explanation of benefits (EOB). When your health insurance claim is denied, the EOB should explain why. You may receive an EOB from your insurance company through the mail, in an email, or as a notification on your insurance account online dashboard.
Insurers must justify all decisions regarding health plan insurance claims with legal regulations or the terms of your policy, meaning they can’t just make up rules on the fly and deny your claim arbitrarily.
If you disagree with your insurer’s decision, you have legal rights under the Affordable Care Act (ACA) and other federal laws to appeal the decision. Here’s what to do when you receive an initial claim denial:
Review your explanation of benefits and the reason for the denial. Go over the EOB your health insurance company gave you explaining why it rejected your claim.
Review your plan documents to see if the claim should be covered. Check your healthcare plan documents to see what’s actually covered by your policy. Look for any discrepancies or mistakes in the insurance company’s reasoning and for evidence of what your plan covers.
File an appeal with the insurer. If you believe you should still receive coverage for your claim after reviewing your benefits and healthcare documents, start the appeal process.
See Also: Do You Need Health Insurance Coverage?
How to appeal an insurance company claim denial
The process for appealing health insurance claim denials can have two stages: internal and external appeals. These processes are standardized by the Departments of Health and Human Services, Labor, and the Treasury. Here are the differences between the two.
Submit an internal appeal
An internal appeal is a request you can make to your insurer when it denies a claim. This is typically the first step to disagreeing with your insurer’s claim decision. You have up to 180 days from the date on your denial notice to file an appeal.
During the internal appeals process, fill out all the forms your insurer requires. Submit important or helpful information, like a letter from your healthcare provider. If you need help, contact the Consumer Assistance Program where you live.
Once your insurance company receives your paperwork, it will conduct an investigation and review all evidence presented before making a final decision. Keep in mind, the steps in a health insurance appeal can vary from insurer to insurer, but the basic process for appealing is the same.
How long will the internal appeal take?
If you haven’t yet received the service that you’re appealing, the insurance company must complete your internal appeal within 30 days. If you’ve already received the service, the insurance company has 60 days to complete the internal appeal.
If the insurance company still denies your claim after it reviews your appeal, you can request an external review. In its final notice, the insurance company must give you instructions on how to make an external review request.
Make an external appeal
An external appeal lets you take the matter further by submitting your dispute to an organization that specializes in resolving health coverage disputes between parties. Depending on where you live, this could be either a state agency or a federally facilitated appeals entity that provides an external review.
Pay attention to time limits when it comes to this step, and submit your request for an external review promptly. You typically have to file a written request within four months of receiving a claim denial.
While filing an external appeal may feel intimidating, several federal and state laws protect your interests. Your state might have its own external review process. If it doesn’t, the Department of Health and Human Services will assist with your external review.
How long does an external review take?
You should receive a decision for a standard external review no later than 45 days after your request is received. If you’ve filed an expedited external review, you should receive a decision no later than 72 hours after the request was received.
Other consumer protections
Health insurance is complicated, but new protections are in place to help alleviate financial stress as of Jan. 1, 2022. For example, in an emergency, consumers are now protected against exorbitant costs if they’re out of network. Additionally, the Consolidated Appropriations Act of 2021 includes the No Surprises Act, which aims to create price transparency and avoid surprise costs. Because of the No Surprises Act, consumers can now submit disputes for external review when they get a medical bill that was more than expected.
Read More: The 10 Best & Worst Medicare Advantage Plans
Why insurance companies deny claims
Health insurance claims can be denied for a variety of reasons. From pre-approval requirements that weren’t met to provider-side filing errors, there’s no shortage of potential causes. Here are a few of the most common reasons you should be aware of:
Pre-approval requirements: If you need prior authorization from your insurer before getting care and you don’t obtain it, this could lead to a denial.
Late filing: Insurance companies require claims to be submitted within certain windows of time (these vary depending on the organization). Claims filed after those deadlines are likely to be rejected.
Medical billing errors: Even if you have all the right information, mistakes in how the claim gets coded can lead to rejections.
Medically unnecessary procedures/treatments: Insurers will only pay for services they consider necessary medical care and covered under their policies. Any extras they deem unnecessary won’t get approved, so make sure you understand what qualifies before seeking care.
Experimental procedures: Many insurers don’t cover experimental treatments unless they’ve been FDA-approved.
Out-of-network providers: Care received from out-of-network providers may not qualify for coverage benefits.
Not covered by policy: Your insurance company may not cover certain treatments and medications.
Learn More: When Is Health Insurance Open Enrollment?
What insurance companies must cover
The Affordable Care Act requires insurers to cover a range of procedures and services in 10 categories. These include emergency services, maternity and newborn care, preventive care, dental coverage for children, and more.
The ACA prevents most insurers from refusing to cover pre-existing conditions. This means that people with pre-existing conditions won’t be denied coverage or face higher premiums just because of their health condition. The only exception to this rule is individual policies that were in force before the ACA was passed and are exempt from some of the law’s regulations.
See Also: How to Compare Medicare Advantage & Get the Best Plan
Health insurance claims and denials FAQs
Health insurance can be complicated, especially when it comes to claims and denials. Here are answers to some frequently asked questions about them.
What’s the difference between a denied claim and a rejected claim?
A denied health insurance claim means your insurer said no to the claim you submitted. However, a rejected claim is one that has an error in it. It generally means you need to update your paperwork or submit some missing information.
What is an expedited appeal?
An expedited appeal is a shortcut you can take to get the answers you need more quickly if you’re in an urgent situation. In this case, you can request an external review as well as an internal review. You should get a response to an expedited appeal within three business days.
How long does an insurance appeal take?
An internal appeal can take up to 60 days, and a standard external review can take up to 45 days. However, in urgent situations, you can expedite an appeal and get a decision within 72 hours.
How long can you wait to appeal a claim denial?
If you’ve received a claim denial, you have up to 180 days after the date on the claim denial letter to submit an appeal. The sooner you submit an appeal, the sooner you can get it resolved.
- Centers for Medicare & Medicaid Services. "External Appeals." Accessed February 7, 2023
- HealthCare.gov. "Appealing a health plan decision: Internal appeals." Accessed February 7, 2023
- HealthCare.gov. "Appealing a health plan decision: External Review." Accessed February 7, 2023
- Kaiser Family Foundation. "Consumer Appeal Rights in Private Health Coverage." Accessed February 7, 2023
- HealthCare.gov. "What Marketplace health insurance plans cover." Accessed February 7, 2023