According to industry experts, medical insurance customary denied claims account for almost 90 percent of all health insurance claim denials. Health insurance can indeed be the most difficult type of insurance to deal with the claims submission process. Insurance companies will often deny claims for a variety of reasons, such as the fact that the medical service was "out of network" or that the claim amount is above the "customary and reasonable" charges.
What to Do About Medical Insurance Customary Denied Claims
Health insurance companies reject hundreds of thousands of claims every year. On average, only one in ten insurance consumers choose to appeal those denied claims. The majority of health insurance customers believe that once a claim is denied, there's not much that can be done to reverse the decision. This couldn't be further from the truth. While the appeals process can sometimes take a long time - often up to four to six months - those who do navigate the appeals process often discover that it really is possible to overturn a medical insurance customary denied claim.
Customary and Reasonable
When an insurance company determines the amount that is "customary and reasonable" for a particular service, they examine what other physicians in the geographic area charge for those services as well as the "reasonable cost of service" for that particular patient's medical condition. Unfortunately, getting access to that information can be difficult for patients because both insurance companies and doctors aren't always willing to share those rates with the public. However, if you remain diligent when you are in need of medical services, your actions can have a significant impact on how much you end up paying and how your claim is handled.
The most important thing you can do to avoid being stuck with paying costs that the insurance company determines "unreasonable" is to ask the doctor's office how much the service is going to cost at the same time you make the appointment. Once you have that amount, call your insurance company, explain that you have an appointment for a particular service, and you need to know the customary and reasonable rates for that service.
While some other developed countries throughout the world enjoy the right to appropriate and reasonable health care, many Americans continue to struggle against corporate insurance companies that constantly seek new and creative ways to "cut costs." Sometimes when the insurance company cuts costs it will result in the consumer absorbing more costs. However, cost-cutting is most often the motivation behind why many health insurance companies seem to excessively and arbitrarily deny health insurance claim. Obviously there are some claims, such as those for unnecessary plastic surgery, that won't be covered by medical insurance. However, these companies rely on the fact that hardly 10 percent of policyholders choose to fight a denial, so in some instances even if even the slightest reason can be found to deny a claim, it will be denied. Common reasons include:
- Service was rendered by an "out-of-network" provider.
- The patient or provider waited too long to submit a claim.
- The charges or service exceeded what the insurance company defines as reasonable and customary health care.
How to Appeal a Denied Claim
Just because your insurance company initially decided that the cost of your medical treatment, or the medical treatment itself, was not customary and reasonable doesn't mean that the insurance company is correct. Some doctors are willing to write letters of medical necessity for you, which will be a huge help when you are appealing the denied claim with your insurance company.
Never fail to fight a denied medical claim. The process may require a little bit of effort on your part, but the appeals process is the only method that you have to protect your family's financial health from unexpected medical costs. The following steps will increase your odds of success in the appeals process.
- Do not pay the bills that the provider sends you, but assure them that you're actively appealing the denied claim with the insurance company.
- Develop a professional and powerful appeals cover letter that briefly describes the history of your (or your family member's) medical condition and provides a summary of the case outlining why the medical treatment was customary and reasonable.
- Send the cover letter along with the appeals forms (which you can obtain from your insurance company).
- Make sure to send your doctor, or the hospital, a copy of your correspondence with the insurance company.
If you need help while you're preparing for, or going through, the appeals process, contact the organizations that are set up to assist consumers with such insurance issues. These include the Insurance Commission of the state where you live, which you can find on a list at Unitedpolicyholders.org. If you are a Medicare patient, then make sure to contact Medicare for assistance.
The Necessity of an Appeal
Ultimately, the only reason insurance companies get away with denying so many claims every year is because so many people don't bother standing up and fighting those denied claims. By taking a stand each time one of your medical claims is unfairly denied, you will also be taking a stand for all of the other insured customers around the country who also face the tremendous difficulty of denied claims.