Navigating Health Insurance Claim Denials

Each year, nearly 1 in 5 in-network healthcare claims are denied in the United States. Despite paying hundreds in monthly premiums for insurance, most patients will encounter a claim denial at some point in their healthcare journey. These unexpected denials can leave you feeling frustrated and uncertain, especially if they result in hefty bills for essential medical care.

The good news? A claim denial is not always the end of the road. With the right knowledge and approach, you can successfully resolve many denials. In this guide, we’ll explain the basics of insurance claims and claim denials, uncover the most common reasons for denials, and walk you through actionable steps for when your necessary coverage is denied. Armed with this information, you’ll feel more confident and prepared the next time a claim for coverage is rejected. 

Understanding Claims and Denials

When you visit a healthcare provider or undergo a medical procedure, you typically pay a portion of the cost upfront—like a copay, coinsurance, or part of your deductible. These payments cover your share of the bill, while the rest is typically billed to your insurance.

To receive payment for the remaining balance, your provider or facility must submit a claim to your insurance company. In most cases, this is done on your behalf, but if you receive out-of-network care, you may need to file the claim yourself. Keep in mind that claims must be submitted within a specific timeframe — usually 90 to 180 days from the date of service.

Once a claim is filed, your insurer reviews it to determine whether the care is covered under your plan. If the claim is approved, your provider is paid according to pre-negotiated rates, and you’ll receive an Explanation of Benefits (EOB). This document breaks down the costs, showing what the insurer paid and any remaining balance you may owe.

However, not all claims are approved. If your insurer determines that the care isn’t covered or only partially covered, they may deny the claim. This can leave you on the hook for the rest of the bill. 

Fortunately, insurers are required by law to notify you in writing when they deny a claim. This notification, often included in your EOB, must explain the reason for the denial and outline your right to appeal. You can challenge the denial directly with your insurer and, if necessary, escalate it to local or federal agencies for review.

Why Health Insurers Deny Claims

While coverage can significantly vary between health plans, several common reasons often lead to claim denials across insurers.

Your claim for necessary care may be denied due to:

• Incomplete or Incorrect Information: When your claim is submitted, there may be errors in your patient information, policy details, or the medical codes for your procedure.
• Lack of Preauthorization: If your policy requires preauthorization, failing to get approval for your test or procedure may result in your claim being denied.
• Out-of-Network Services: Plans such as HMOs and EPOs typically require you to use only in-network providers; your claim can be denied if you use out-of-network services.
• Policy Exclusions: Certain procedures or treatments may not be covered by your plan, possibly because they are classified as cosmetic or lack FDA approval.
• Medical Necessity Disputes: Your insurer may believe the services you received were not medically necessary.
• Timely Filing Requirements: Your healthcare claims must be submitted to insurers within a specific timeframe, or they may be denied.

If your claim for care was recently denied, look out for an EOB or denial letter. These documents will outline the reason for your claim’s denial and explain how you can start the appeal process. 

How to Fix a Denied Claim

It’s important to remember that a claim denial is not the end of the road. In certain situations, it’s possible to get your health insurer to reverse their decision and cover your care — minus any fees you are responsible for. 

If your healthcare claim has recently been denied, follow these simple steps to begin the appeals process.

1. Understand the Denial
   • Carefully review the Explanation of Benefits (EOB) or denial letter sent by your insurer.
   • Your insurance provider is required by law to explain why your claim was denied. 
   • If you’re unclear about the reason, contact your insurance company directly. A telephone number may be located on your insurance card. 
2. Contact Your Provider
   • Inform your healthcare provider’s office about the denial.
   • Many providers will assist with navigating the appeal process on behalf of their patients.
   • Ensure your provider has a copy of the EOB or denial letter if they haven’t already received one.
3. Ask for a Letter of Medical Necessity (LMN)
   • Ask your provider’s office for an LMN — a letter from a healthcare professional explaining the necessity of your specific treatment.
4. File an Internal Appeal
   • If you haven’t yet received care, request a Peer-to-Peer (P2P) review.
     • A P2P review allows your doctor to discuss your case directly with the insurer’s medical director.
   • If the P2P review is unsuccessful, or if you’ve already received care, follow the insurer’s internal appeal process outlined in your EOB or denial letter.
     • Your insurance company must provide you with detailed instructions on filing an internal appeal.
     • Appeals must typically be filed within 180 days of receiving the denial.
5. Request an External Review
   • If the internal appeal is unsuccessful, or you require urgent care, you can also request an external review where an independent third party assesses your case. 
     • Most states have their own external review process that meets or exceeds federal standards. 
     • If your state does not have its own process, the Department of Health and Human Services (HHS) will oversee your appeal.
   • Your EOB or denial letter should provide the contact information for the organization that will be handling your review. 

If your insurer still refuses to approve your necessary healthcare after the appeal process reviews, you may still have other options. Consider seeking support from a local patient advocacy group or consulting a healthcare attorney for next steps.

Taking Control of Claim Denials

Denied claims can be frustrating and overwhelming, but they don’t have to mark the end of your healthcare journey. With persistence and the right approach, many denials can be overturned, ensuring you receive the care you need without unexpected costs.

If you’re facing a denial for necessary medical care, remember that you have options. By staying informed, following the appeals process, and seeking support when needed, you can take control of the situation and advocate for the coverage you deserve

Sources: Healthcare.gov (1,2,3), Patient Advocate Foundation (1,2,3), American Cancer Society (1), Department of Health and Human Services (1).