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.^[1] Here’s what to do when you receive an initial claim denial:

1. 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.

2. 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.

3. 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.^[1] 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.^[2]

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.

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.^[3]

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.

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.^[4]

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.^[5]

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