How to Appeal Health Insurance Claim Denials

Common Claim Denial Reasons and How to Write a Claims Appeal Letter

Envelope with rejected letter in flat design
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Sometimes you have to fight for your rights when it comes to health insurance. You could have a claim denial for a valid reason but mistakes can happen, too.

Before you appeal the decision, you must find out why it was denied.

Some health insurance claim denial reasons are because of how the claim was entered, a mistake made by the claims processing agent, or there was missing information.

All health insurers have appeal processes that allow members to contest a claim denial. If you know how to fight a health insurance claim denial, you may have your claim covered through the appeal process.

The Difference Between a Denied Claim vs. Rejected Claim

A health insurance claim denial is when an insurance company does not approve payment for a specific claim. In this instance, the health insurer has decided not to pay for the procedure, test, or prescription.

If your claim is rejected, it does not get processed due to incorrect information when submitting the health insurance claim form.

Rejected claims do not need to be appealed. Correct the error and resubmit the right information to have the insurance company begin processing the claim.

5 Reasons a Health Insurance Claim Could Be Denied

Knowing why your health insurance claim was denied is an important aspect to knowing if you can appeal the decision. If your appeal goes through, the company must pay for the claim even though it was originally denied.

Here are five common health insurance claim denial reasons:

  1. Incomplete or missing information in the submitted claim documents or medical billing errors.
  2. Your health insurance plan may not cover what you are claiming or the procedure may not be considered medically necessary.
  3. You may have exceeded the coverage limits in your plan.
  4. The drug or therapy is off-formulary and not part of your health plan.
  5. Using out-of-network services or using your health insurance out of state when your health plan requires "in-network" providers.

How to Fight a Health Insurance Claim Decision

You will receive a denial notice if your health insurance claim is denied. The notice should tell you how long you have to appeal the decision, which is crucial to making sure you don't miss your deadline.

Before you begin the appeal, determine the reason why your claim was denied. Appealing a denial does not always make sense when your plan states service is not covered, you were out of network, or you already exceeded the coverage limit.

If you're not sure, review your health insurer's website or call them to understand your health insurance policy coverage and the reason for your claim denial.

Write an Appeal Letter to Fight a Claim Denial

Writing an appeal letter for your denied health insurance claim is a matter of communicating the proper information to have your case looked at as soon as possible.

If you request an appeal but don't know why your claim was denied, the insurance company may have difficulty reviewing your appeal. Talk with your insurance company to make sure you understand the reason for the denial and how their appeal process works.

To avoid delays, follow their procedure for the appeal and send the information they request to the right department or person.

What Your Appeal Letter Should Include

A health insurance claim denial an be a frustrating and emotional experience. However, keeping your appeal letter simple and to the point is the best approach.

Your appeal letter should be as "matter of fact" as possible and include any information your insurance company has told you will be required.

Specifically, your appeal letter should include:

  • Opening statement. State why you are writing and what service, treatment, or therapy was denied, and the reason for the denial. For example, your statement could go something like this: "I am writing about claim number 123456ABC. I received a letter denying my claim for XYZ services, for this reason: ______________. I would like to appeal this decision."
  • Explanation and history of your medical condition or health problems. Explain why you need the treatment and why you believe it is medically necessary. List any treatments you have already tried and why the current treatment may be a solution.
  • Supporting information from your doctor. To help your insurance company reconsider your claim, provide documentation from recognized institutions that show the services as part of a recognized treatment plan.

Send your appeal within the time limits by certified mail so you have proof that you submitted your request within the time limit.

When looking to appeal a health insurance claim denial, the key is to understand your coverage and why your claim was denied. If you're having trouble, the Patient Advocate Foundation also provides some helpful tips and resources on appealing a health insurance claim denial here.