How to Contest an Insurance Company Decision
How to Contest an Insurance Company Decision
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How to Contest an Insurance Company Decision
Anyone who has ever had to file an insurance claim knows that the process is almost always complicated. So what happens when insurance unfairly denies coverage for your claim?
While this sounds like a worst-case scenario, it happens with surprising frequency. In fact, the U.S. Department of Labor estimates that around 1 in 7 health claims made under employee health plans are denied. Unfortunately, not all of these denials are fair, and you could end up paying out of pocket for an injury that should be covered.
Don't give up if you find yourself with a denied insurance claim. There are a few different paths for contesting an insurance company decision.
Keep reading, and we’ll cover everything you need to know. And if you decide it’s time to speak with an attorney, fill out our contact form to schedule a free case evaluation today with the skilled attorneys at Morgan & Morgan.
Understanding the Duty of Your Insurance Provider
Before you ask how to contest an insurance company decision, you first need to understand the essential duties of a health insurance provider. This goes beyond your specific plan and coverage and gets to the heart of what an insurance provider actually provides.
Keep reading to learn more about the duties owed to you—the insured. And if you believe that your provider has fallen short in their duties, it may be time to call a lawyer.
Duty to Defend
If a claim from a third party is brought against you, the insurance provider has to defend you.
Duty to Indemnify
If you are found liable for losses in a claim brought against you by a third party, the insurance provider must pay them.
Duty to Handle Claims Quickly and Fairly
Essentially, the provider must act promptly to investigate the claim and make a fair decision.
Duty to Disclose Conflicts
The provider must inform you of any conflicts or problems that arise in filing your claim.
If you believe your insurance provider has not upheld its duties or acted in good faith, you need to call an attorney. It may be time to settle the matter in a legal setting.
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How to Figure Out What Your Health Insurance Covers
The next step in determining whether your insurance provider has behaved fairly is to understand what your health insurance actually covers. You won’t be able to learn how to contest an insurance company decision until these details are ironed out.
First, you should understand that “coverage” does not always mean the service is free. Oftentimes, you will need to pay a copay or a percentage of the billed service.
Next, it’s important to understand that you can only receive coverage when visiting an in-network doctor. In other words, the doctor must accept your type of insurance.
Once you understand those basic principles, it’s easier to dive into the question of what your coverage includes. We recommend you answer this question by taking a close look at your summary of benefits and coverage. You can access this information by creating an online account with your insurance provider.
Anytime you need to make an appointment, you should access this web page or document to determine whether your insurance covers the service—and if so, by how much? It’s also wise to use your provider’s doctor search tool to ensure that the doctor you want to see is covered.
The Five Most Common Reasons for Claim Denials
If you are certain that you understand your rights and coverage and believe that a claim was denied unfairly, it may be time to appeal the decision. Unfortunately, claim denials happen every day and for a variety of reasons. Understanding those reasons might help you avoid a problem in the first place.
Commonly, providers deny claims for these five reasons:
1. You Failed to Obtain Pre-Certification
Pre-certification is often needed for planned medical procedures, such as MRIs, CAT scans, hospitalizations, and surgeries. If your healthcare team fails to get precertification for these types of services, you may find that your claim is ultimately denied.
Thanks to medical billing software updates, this problem is happening less often. Still, it’s a possible scenario and one which you should consider if and when your claim is denied. Reaching out to your medical provider can help you determine whether this is the issue at fault.
2. Errors Were Made on the Claim Form
Something as simple as a clerical error can affect the status of your claim. If your name was misspelled or the ID number left incomplete, you could find that your claim is denied.
Fortunately, this is usually an issue with a quick fix. But it could prolong your wait to receive compensation.
3. The Claim Missed a Deadline
Just as your provider must respond to claims in a timely manner, you have to make your claim in a likewise timely way. Different providers have different policies for dealing with missed deadlines. If your claim was denied for this reason, you might have options for resubmitting the claim.
4. The Service Was Not Medically Necessary
Your provider won’t pay to cover a procedure if it’s deemed to be medically unnecessary. This is why pre-authorization is an essential step in the claims process.
If your claim is denied for this reason, you may be able to ask the medical provider to appeal the decision for you and clarify why the procedure is indeed necessary.
5. An Out-of-Network Provider Serviced You
Earlier, we mentioned that insurance providers withhold coverage when a service is obtained from an out-of-network clinic, hospital, or doctor. If you fail to do your due diligence and pick a provider who doesn’t accept your insurance, you could face a claim denial down the road.
Two Ways to Appeal the Decision Made by Your Insurance Provider
Whether your claim is denied for one of the above reasons—or because of some other perceived problem—you can appeal the decision. In fact, you have the right to appeal the decision regardless of the reason for the claim denial. Essentially, if you decide to appeal, you have two separate options:
An Internal Appeal
To file an internal appeal, you must follow the guidelines set by your insurance provider. Typically, this includes filling out various forms and providing additional information about the claim.
If you have a letter from your doctor, submit it with these appeal forms. Generally, you have a six-month window to file an internal appeal for a denied claim.
If this process seems intimidating, you can hire a lawyer to help you get the job done. Or, you can contact your state’s Consumer Assistance Program, and they can file the appeal for you.
An External Review
The next option for how to contest an insurance company decision is an external review. With this route, you take the issue to a third party for review. This means that the insurance provider will no longer have the final say on whether the claim is accepted or denied.
You have four months from the date of your claim denial to submit a written request for an external review. Only certain claim denials are eligible for an external review. So it may be a good idea to consult with an attorney if you would prefer to go this route.
Knowing When to File a Lawsuit
If an insurance company’s decision has put you in a bad place, you may wonder whether you can file a lawsuit to cover the damages. It is possible to file a lawsuit, but only if it seems as though the insurance provider violated the terms of your policy.
We’ve already covered the insurance company's duties owed to you, the insured. With those in mind, here are a few of the common reasons for filing a lawsuit against an insurance provider:
- The investigation into the claim was delayed or insufficient
- The claim is unfairly denied
- The claim is not approved/denied within a reasonable time frame
- The provider did not give a reason for the claim denial
These are just a few reasons why you might pursue a lawsuit. Any time you believe you are treated unfairly by an insurance provider, it’s worth making a call to an insurance specialist or attorney. You could be eligible for a breach of contract action or a bad faith tort lawsuit.
Is There a Statute of Limitations for Suing Over a Wrongly Denied Claim?
The time period in which you must file a lawsuit will depend upon your policy and the state in which you reside. Oftentimes, you have two years from the date of denial to file a lawsuit.
When Should I Talk to My Lawyer About a Claim Denial?
We recommend that you contact an attorney as soon as you receive a letter of denial. Even if you do not pursue litigation, an attorney can help you choose the best course of action for getting the claim accepted.
How Much Will an Insurance Attorney Cost Me?
Many attorneys—Morgan & Morgan included—only require payment once the case is settled or won. If you have questions about how much you will owe an attorney after that happens, make sure to ask early and upfront, so you know what to expect.
Schedule Your Free Case Evaluation
At Morgan & Morgan, our attorneys would love to discuss your situation in greater detail. Tell us more about your experience by scheduling your free case evaluation today through our online contact form. We will help you decide how to contest an insurance company decision in the best way.