Health Insurance Claim Denial Reasons

October 18, 2024

Health insurance claim denials happen frequently and are concerning to those who receive them. Medical care is costly, and being asked to cover unreimbursed claims is a burden.

Understanding why your claim was denied is important; this knowledge can help you appropriately address the decision.

The reasons for denial vary based on the situation at hand and the language of your policy. In some cases, they may be legitimate.  Perhaps your claim wasn’t submitted appropriately, or maybe the care you received was not covered.  That said, your insurance company may have also failed in its duty to serve you in good faith. Whether the denial was for a small amount of money for a simple procedure or a costly, possibly life-saving treatment, you should take action.

If you think your claim denial was a mistake, or if you believe your insurance company acted inappropriately, obtaining guidance and counsel from a denied health claims attorney is in your best interests.  When individuals have legal representation, insurance companies are more likely to take their request for review seriously.

Why Do Health Insurance Claims Get Denied?

In life, knowledge is power. One instance when this is particularly true relates to health insurance denials. You cannot effectively address them if you don’t understand why they occurred.  Below are some of the most common reasons insurance companies deny health care claims.

Paperwork Errors or Insufficient Information

When your paperwork is incorrect, insurance companies will deny your claim.  Issues may be as simple as a typographical error, or the insurance company may have incorrect records or information. In other cases, your provider may have submitted an erroneous billing code. In any case, the insurer won’t make a coverage decision without correct details. These issues can usually be rectified by resubmitting your claim according to their instructions.

Treatment Is Not Medically Necessary

In order for your claim to be covered, it must be considered medically necessary.  In some cases, policies don’t cover certain procedures, like cosmetic surgery, unless they are medically necessary. You may be able to get the company to change its position with additional information or records, and your physician may need to contact the company to better explain your situation.  Your insurance claim denial attorney can help determine exactly what you need to provide.

Cost Control

Managing costs is a primary goal of insurance companies. Every paid claim is an expense that reduces their profitability.  As such, insurance companies often deny claims for certain treatments because they would rather you try a less expensive option first.  They may suggest a different drug or a course of physical therapy instead of surgery.

If the less expensive option does not jeopardize your health, it may be worth trying their suggestion. But if time is critical or your physician believes the insurer’s suggested treatment won’t work, you will need to address the denial.  In all cases, your doctor should be involved in the decision on your best course of medical treatment.  An experienced attorney can help you work with the insurance company to have your claim reviewed.

What You Want Isn’t Covered by Your Plan

Claims are often denied simply because they are not covered. For example, drugs or treatments that do not yet have Food and Drug Administration approval are often turned away. In some cases, your policy may not comply with the Affordable Care Act (“Obamacare”) so many services may not be covered.

Your carrier won’t pay for experimental treatments or those it feels are not sufficiently proven to be safe and effective. With enough documentation and input from your physician, you may be able to convince your insurance company to change its mind. Work with your doctor to show the requested treatment is:

• Medically necessary
• Considered standard by the medical community
• The only treatment that may work (you’ve unsuccessfully tried others)
• Less expensive than the standard treatment.

If you’re in a clinical trial, those organizing it should pay for your related medical appointments and treatment.

Provider Network Issues

Sometimes the physician you select may be outside your provider network. If your policy covers treatment only by those in its provider network, you may find all or part of your claim denied.  In some cases, policies allow coverage outside the network with pre-approval, which you may not have gotten. If what you need isn’t available in network, the company should make an exception.

If your preferred, out-of-network healthcare provider agrees to be paid the insurance company’s in-network rate, the carrier may agree to your request. If this is the case, your provider may bill you the difference between what it normally charges and what your insurer will pay. Preapproval for issues like this are critical as you don’t want to be saddled with uncovered expenses.

Right Treatment, Wrong Place

Your carrier may not have a problem paying for treatment but may want you to have it done at a particular medical practice or hospital. You may want to be admitted to a hospital, but the carrier may require the procedure done on an outpatient basis. In order for your expenses to be covered, you must receive treatment at the location specified by your insurance policy.

You or Your Healthcare Provider Didn’t Follow Your Health Plan’s Rules

Reasons a health insurance claim is denied could include your breaking one of the many rules you need to follow.  A significant problem may be getting pre-authorization from the insurer before a procedure, test, or scan. It’s a tripwire for unaware patients. Not getting pre-authorization is a simple way for the insurance company to deny coverage and save money.

Look up your coverage or call your carrier to learn everything that requires pre-authorization. In many cases this applies to specialists, but it also may include tests, X-rays, MRIs, and CT scans. Without their prior okay, the company will probably deny your claim. If you learn this is a problem before your insurer’s official denial, your physician may be able to backdate the authorization request.

Lack of Payment

Your coverage may be denied because a premium wasn’t paid. If you made a good-faith mistake or the nonpayment was caused by something out of your control (e.g., your employer made an error), explain your situation as best you can, in writing. If your employer or payroll service caused the problem, a letter from them or a conference call between the three of you could help.

Doug Terry Law Can Help Address Your Issues

We Understand  Health Insurance Claim Denial Reasons

Sometimes insurance claims are denied for good reasons, while at other times bad faith is involved. Understanding the reason why you received the denial letter is critical to addressing your insurance company’s response.

If your claim was denied as a result of a clerical error, resubmitting should be simple.  However, if you believe your health insurance claim denial reasons violate your rights, engaging the assistance of a denied health insurance claims lawyer is in your best interests.

Mr. Terry has decades of experience in the industry. After beginning his career working for insurance companies, he pivoted, recognizing that every day people need quality legal advice in managing their insurance issues.  He has made a commitment to serving those in Oklahoma and earned an outstanding reputation.

Doug Terry Law is well-positioned to help you with your  insurance disputes.

In addition to reviewing your initial denial, we can assist with internal appeals, external reviews, and even bad faith lawsuits.  Contact our office today by calling (405) 463-6362 to schedule your no-cost case evaluation and learn how we can help you move forward.