Reasons for Claim Denials
"I needed my daughter to have a pediatric PPH specialist, rather than just a pulmonologist…I submitted a request in writing to the lady with the insurance company who handled my company's health insurance plan. It was initially denied.
I then wrote to several PPH Doctors asking for letters backing up my position that it was medically necessary to have a PPH specialist. I also did an internet search and collected medical journal articles…I sent a typed letter stating my position of it being medically necessary and attached all of the doctors letters, medial journal articles, medical records documenting my daughter's worsening condition…About two weeks later, a physician reviewer for the insurance company approved my request."
There are numerous reasons why insurance companies may deny services or claims. It is important to review the reason your claim is denied, as it helps you determine your next steps.
Here are some of the most common scenarios for service or claim denials you may encounter:
Services are not covered by your health plan
Some insurance companies will not cover specific services, health care providers or types of treatment. This is known as benefit exclusion. The most common exclusion obstacle faced by PH patients is that their drug is not on their plan’s formulary, the limited list of drugs subject to coverage under the plan.
File a grievance to get an exception to the benefit exclusion, if you receive a claim stating that the service is not a covered benefit or if you receive a denial for a prior authorization request.
You will want to call your insurance company to verify the services they show you have received and/or the coverage exclusions of your plan. Review this information with your provider to ensure the service was filed correctly and determine your next steps for appeal.
Medical necessity was not established
A prior authorization or claim may be denied if the insurance company does not feel that the service you are requesting or received is appropriate for your condition and/or diagnosis. Many health plans require you to try several treatment options prior to covering more costly alternatives.
Work with your provider to collect all previous medical history and chart notes to submit with an appeal in support of the reason for the prescribed service. Documented proof of medical history will support any information you provide in a letter to the insurance company.
"I had received 2 separate letters, both approving my Flolan therapy. I later started receiving EOBs that said they [insurance] were denying all the charges for Flolan as it was considered an experimental drug. Showing them those letters was what saved me from having to pay for Flolan myself."
Try contacting the manufacturer of the product you are being prescribed, as they can often provide you with a copy of the package insert and results from the clinical trials. This information can help demonstrate efficacy and possibly cost effectiveness compared to other treatments.
View our Physician Statement of Medical Necessity template letter (MS Word doc)
Prior authorization was not obtained
Insurance companies may require individuals to obtain a prior authorization before receiving a medical service. If this is not completed, you may receive an Explanation of Benefits (EOB) that states that the service/claim was denied because prior authorization was not obtained.
Some insurance companies will allow physicians to request a retroactive authorization. This will allow the insurance company to authorize treatment back to the time when your service was rendered. Be sure that you or your provider then requests that the denied claim be reprocessed referencing the authorization for correct payment.
Learn how to obtain prior authorization
If you have obtained prior authorization for a service and the claim is denied, provide copies of the authorization letters to your insurance company to show that proper procedures were followed.
Claim was filed incorrectly
Many insurance claim denials occur due to filing and/or processing errors. Many times this is not easily recognized because the denial reason on your EOB will not specify that there was any filing or processing error.
You and/or your health care provider will need to work very closely with the insurance company to ensure that the services they show you received match those for which you and/or your physician billed. Also, be sure to have them check the diagnosis code, as this could also affect the services that are/are not covered.
Contact us with insurance questions, success stories or suggestions.
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