What Information You Can Access After an Insurance Claim Denial
More than one out of every three adults in the United States (US) experience at least one insurance claim denial,1 a rate that has recently increased. A report from the US Senate Permanent Subcommittee on Investigations showed that the denial rate doubled in a short 2-year period from 2020 to 2022, partly due to the assistance of AI-powered tools.2 Worse, these AI-powered claim denials may be wrong 90% of the time, as alleged in a recently submitted class action lawsuit.3
Navigating the complexities of the health insurance industrial complex can be daunting following a denied claim. However, patients have specific rights to information that can help them understand the reasons behind a denial and guide them through the appeals process. Knowing these rights, as mandated by law, empowers patients to advocate for their healthcare needs more effectively.
Understanding the Denial
When an insurance claim is denied, the first step is understanding why. Under the Patient Protection and Affordable Care Act, more simply known as the Affordable Care Act or ACA, insurance companies must provide clear and comprehensive explanations for claim denials.4,5 This explanation must include the specific reason for the denial, whether due to a lack of coverage, a procedural error, or a determination that the service was not medically necessary. Knowing the exact reason for the denial is crucial as it determines the next steps in addressing or appealing the decision.
Right to Appeal
Patients are guaranteed the right to appeal a denied claim. This includes both an internal appeal, where the insurance company re-evaluates the decision, and an external review, where an independent third party assesses the claim. The denial notice must outline the steps for initiating an appeal, including deadlines and required documentation.
Obtaining Medical Necessity Criteria
For claims denied based on medical necessity, patients are entitled to access the criteria used to make this determination. Insurance companies must provide, upon request, the clinical rationale and guidelines that informed their decision.
Timely Notification
The law mandates that insurance companies provide timely notification of claim denials. Urgent care claims require a decision to be communicated within 72 hours. For non-urgent care, decisions must be notified within 30 days for pre-service claims and 60 days for post-service claims.
Access to Assistance
Patients also have the right to seek assistance in understanding their rights and the denial process. Many states offer consumer assistance programs that provide support and guidance in dealing with insurance issues. Additionally, the denial notice should include contact information for these resources.
Conclusion
Many patients do not begin the appeals process due to the significant burden; however, most patients underestimate their chance of winning the appeals process.1 Understanding the information you are entitled to after an insurance claim denial is a powerful tool in navigating the appeals process. By knowing your rights to a clear explanation, access to internal guidelines, and the criteria for medical necessity, you are better equipped to challenge denials and advocate for your healthcare needs. As you navigate this process, remember to utilize available resources and support systems designed to assist you in securing the coverage you deserve. How will you use this information to take the next steps to resolve your denied claim?
Helpful resources
https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/appeals06152012a
https://www.hhs.gov/healthcare/about-the-aca/cancellations-and-appeals/index.html
References
- Yaver M. Rationing by Inconvenience: How Insurance Denials Induce Administrative Burdens. J Health Polit Policy Law. Aug 01 2024;49(4):539-565. doi:10.1215/03616878-11186111
- Refusal of Recovery: How Medicare Advantage Insurers Have Denied Patients Access to Post-Acute Care (2024). https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf
- Class Action Complaint. https://cdn.arstechnica.net/wp-content/uploads/2023/11/class-action-v-unitedhealth-and-navihealth-1.pdf
- Has Your Health Insurer Denied Payment for a Medical Service? You Have a Right to Appeal (2024). Centers for Medicare and Medicaid Services. Accessed Dec 18, 2024, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/appeals06152012a
- Cancellations & Appeals (2024). U.S. Department of Health and Human Services. Accessed Dec 18, 2024, https://www.hhs.gov/healthcare/about-the-aca/cancellations-and-appeals/index.html
Brock Hewitt
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