How to fight back if your health plan denies coverage

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Your doctor says you need expensive treatment, but your health insurer says they won’t pay.

It is unclear how often consumers face this dreaded scenario. When this happens, patient advocates say you shouldn’t always accept denial of health plan coverage as the last word.

They recommend asking insurers and health care providers two questions: Why isn’t the service covered? And can the decision be reversed?

If this yields unsatisfactory responses, there are more options, including filing a formal appeal, calling regulators, and asking employers to step in if it’s employment-based coverage.

“I think the first step is to try to see, informally, if you can fix it,” said Karen Pollitz, co-director of the patient and consumer protection program at the Kaiser Family Foundation. “When a problem arises, I usually pick up the phone – wait on hold for how much music they can play for me – and ask if they can reconsider.”

In July, the California-based foundation released an annual report that is one of the most important — albeit limited — assessments of health insurance coverage denials.

Using 2020 data from health plans sold on the federal government’s HealthCare.gov marketplace, the researchers calculated that insurers denied an average of about 18% of claims in the network that year. Denial rates varied widely between insurers, ranging from a low of 1% to a high of over 80%.

The Kaiser report only looked at denials of coverage sold to individuals, who are estimated to be less than 6% of the US population. Federal market data, meanwhile, covers enrollees in just 33 states — a group that doesn’t include Minnesota.

“The reported rejection rate for Market Plans looks substantial to me,” Pollitz said. “We don’t have any sort of baseline comparison, like [the] employer-sponsored coverage rate, which is what most people have.

Why some claims are denied

The rates, however, don’t reflect whether the claims end up being paid, said Kristine Grow, a spokeswoman for America’s Health Insurance Plans, a trade group for health insurers. Denials may occur because health care providers have not provided sufficient information, the request has not been pre-authorized, or a particular referral or service is excluded from coverage, said Lucas Nesse, chief executive of the Minnesota Council of Health Plans, a trade group for the state’s nonprofit insurers.

“Refusals typically result in delayed payments to providers and sometimes require physicians to resubmit claims,” Nesse said in a statement.

Still, there is a subset of denials in which patients are financially responsible for huge medical bills, said Jonathon Hess, chief executive of Athos Health. Neither health care providers nor insurers publicly report information about those denials, Hess said, preventing outsiders from knowing exactly how many people face tens of thousands of dollars in uncovered costs.

That’s why Cancer Legal Care, an Oakdale-based nonprofit that provides free legal services to Minnesotans with cancer, started a program a few years ago to help oncology patients apply for reversals when health plans deny coverage.

Since 2020, the program has helped 31 patients gain coverage for approximately $1.8 million in care.

“Their denials were for a wide variety of reasons and our customers and their providers have been unsuccessful in having the denials overturned,” said Bill Foley, a health insurance advocate at Cancer Legal Care. The non-profit group “committed to this by hiring a few qualified lawyers to help develop and run the program.”

Where to start in case of refusal

Not all medical services will be covered, Foley said. But patients who review the wording of their health plan contract and believe coverage was wrongfully denied have the opportunity to challenge it.

Even before a call, patients should speak to their health plan and healthcare providers to see if there might be a way to resolve the situation, as denials can come from billing errors that can be corrected.

Insurers have an internal and then an external appeal process. To make their case, consumers should obtain and review health plan documents that spell out the details of their coverage, Foley said. These are detailed documents that regularly exceed 100 pages, he noted, not the benefit summaries that span only a few pages that enrollees usually see.

“If you keep hitting dead ends, you need someone who can stand up for you,” Foley said. “Your CFO calls the insurer or your benefits manager calls the broker who signed your company with the insurer – these aren’t the first places to go, but they may be able to get your application reviewed by an executive top of the health system.

What to do if an internal appeal fails?

After attempting an internal appeal with the insurer, individuals with fully insured health insurance plans may request external appeals by submitting a request to the Minnesota Department of Commerce or submitting it to the Minnesota Department of Health. Minnesota. Some workplace plans are regulated by the federal government.

The state’s Commerce Department has staff to help consumers determine which agency regulates their health plan and should therefore address their concerns, said Julia Dreier, deputy commissioner of the department’s insurance division.

Federal data suggests that relatively few people attempt formal appeals in response to denied claims, said Amy Monahan, a benefits law expert at the University of Minnesota. It’s potentially a missed opportunity for people with fully insured health plans in Minnesota, Monahan said, because state court rules here for outpatient appeals are more consumer-friendly than in other states.

Why coverage may differ

With fully insured plans, insurers take on the financial risk for the cost of claims. While individuals as well as many small and medium-sized businesses buy fully insured coverage, many employers — especially large, multistate companies — operate federally regulated self-insured plans.

Increasingly, health insurers are adopting guidance documents that specify the circumstances under which they will provide coverage for emerging and expensive treatments, Monahan said. This “resolution of medical necessity,” she said, is a growing problem for patients because they are forced to argue “about whether you’re on the list, not about whether it’s appropriate medical treatment”.

“You really want to make sure you see this document…because it will tell you the basis on which the insurer is evaluating your claim,” Monahan said. She added: “To my knowledge, there are no large comprehensive sources that tell you the average percentage of medical claims denied.”

How Minnesota Insurers Compare

The Kaiser Family Foundation report found that Bloomington-based Bright Health had denial rates above 18% on individual market coverage in six of the eight states where it operated in 2020. The insurer did not did not answer the questions about the results.

Minnetonka-based Medica has had above-average rejections for its business in individual markets in Kansas, Missouri and Oklahoma, Kaiser reported.

Using the foundation’s methodology, the Star Tribune looked at Minnesota carriers’ regulatory filings in the individual market and found they were less likely to deny claims in 2020. The lowest rate was 6.4 % at Bloomington-based HealthPartners, according to the Star Tribune magazine, while the peak was 15.5% at Medica.

The insurers said they could not verify the Star Tribune calculations.

In general, Medica said it wouldn’t be surprising if the insurer’s denial rate was lower in Minnesota than in other states, because health care providers here work with the health plan to nonprofit for many years. Through experience, doctors and hospitals learn Medica’s rules for submitting a bill, the insurer says, and when an authorization or referral is required.

“In states where we’re building relationships with providers, we’re seeing more denials for incorrect or incomplete billing, missing referrals, or out-of-network services,” Medica said in a statement. “Not all denials are a clinical decision. Many, if not most, are administrative.”

At HealthPartners, officials said they work proactively with members and healthcare providers to avoid unexpected denials, which in 2021 resulted in a 3.5% claim denial rate for all market individual health plans. A portion of HealthPartners subscribers receive care from hospitals and clinics owned by the nonprofit insurer.

“Contracted providers and health plans operate with contracts and administrative policies,” the insurer said in a statement. “If a contracted provider’s claim is denied for coding or submission issues, the provider cannot request full payment from their patient. Claims denied for other reasons may be billed to the patient.”

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