A health insurance denial happens when your health insurance company refuses to pay for something. If this occurs after you’ve had the medical service and a claim has been submitted, it’s called a claim denial.
Insurers also sometimes state ahead of time that they won’t pay for a particular service, during thepre-authorizationprocess; this is known as a pre-authorization—or prior authorization—denial. In both cases, you can appeal and may be able to get your insurer to reverse their decision and agree to pay for at least part of the service you need.
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Why Health Insurers Issue Denials
There are hundreds of reasons a health plan might deny payment for a healthcare service. Some reasons are simple and relatively easy to fix, while some are more difficult to address.
Common reasons for health insurance denials include:
Paperwork errors or mix-upsFor example, your healthcare provider’s office submitted a claim for John Q. Public, but your insurer has you listed as John O. Public. Or maybe the practitioner’s office submitted the claim with the wrongbilling code.
Questions about medical necessityThe insurer believes the requested service is notmedically necessary. There are two possible reasons for this:
Cost controlThe insurer wants you to try a different, usually less expensive, option first. In this case, many times the requested service will be approved if you try the less expensive option first and it doesn’t work (step therapy for prescription drugs is a common example of this).
It could also happen if it’s a service that doesn’t fall withinyour state’s definitionof the Affordable Care Act’s essential health benefits, if your plan is obtained in the individual or small group market. The specifics will vary from one state to another, but examples could be services like fertility treatments, vasectomies, acupuncture, or chiropractic services.
Specifically, Exclusive Provider Organizations (EPOs) and Health Maintenance Organisations (HMOs) generally won’t cover out-of-network care unless it’s an emergency. Preferred Provider Organizations (PPOs) and Point of Service (POS) plans will typically include out-of-network coverage, but the deductible and other out-of-pocket costs will generally be higher than they would be for in-network providers.
Even if your health plan does cover out-of-network care, be aware that the medical provider maybalance billyou for the difference between what your insurer pays and what the provider charges. The provider has the right to do this, since they haven’t signed a network agreement with your insurer.
Note that ground ambulance charges are not subject to the No Surprises Act, so you could still get a surprise balance bill for a ground ambulance charge. The federal government formed a committee tasked with working on rules and regulations to improve transparency and coverage for ground ambulance charges. The committee wrapped up its work in August 2024 when they issued their final report with recommendations for protecting consumers from surprise balance billing for ground ambulance services.Implementation of these recommendations would require an act of Congress.)
Missing detailsPerhaps there was insufficient information provided with the claim or pre-authorization request. For example, you’ve requested or received an MRI of your foot, but your healthcare provider’s office didn’t send any information about what was wrong with your foot.
You didn’t follow your health plan’s rulesLet’s say your health planrequires you to get pre-authorizationfor a particular non-emergency test, and you got the test done without getting pre-authorization from your insurer. Your insurer has the right to deny payment for that test—even if you really needed it—because you didn’t follow the health plan’s rules.
In any non-emergency situation, your best bet is to contact your insurer before scheduling a medical procedure, to make sure you follow any rules they have regarding provider networks, prior authorization, step therapy, etc.
What to Do About a Denial
Whether your health plan denies a claim for a service you’ve already received or it denies a pre-authorization request, getting a denial is frustrating. But a denial doesn’t mean you’re notallowedto have that particular healthcare service. Instead, it either means that your insurer won’t pay for the service, or that you need to appeal the decision and potentially have it covered if your appeal is successful.
If you’re willing to pay for the treatment yourself, out-of-pocket, you’ll probably be able to have the healthcare service without further delay.
If you can’t afford to payout-of-pocket, or if you’d rather not, consider looking into the cause of the denial to see if you can get it overturned. This process is calledappealing a denial, and it can be done in response to a prior authorization denial or the denial of a post-service claim.
While most people with a denied claim do take at least some action to try to resolve the issue, only about 15% file a formal appeal.If the process of appealing the claim denial feels overwhelming, know that your doctor’s office can help you with this.
Summary
If your health plan denies a claim or a prior authorization request, don’t panic. It’s possible that a simple clerical error caused the problem. Your plan might cover the procedure if they receive more information or can see that you’ve tried less costly measures and they weren’t successful. Your doctor or hospital will likely lead the way in the appeals process.
11 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Pollitz, Karen, et al. Kaiser Family Foundation.Consumer survey highlights problems with denied health insurance claims.National Academy for State Health Policy.State definitions of medical necessity under the Medicaid EPSDT benefit.Burns J.There’s a better way to do step therapy.Manag Care. 2018;27(11):12–14.Consumer Reports.Hazardous health plans - coverage gaps can leave you in big trouble.MedlinePlus.Managed care.HealthCare.gov.Balance billing.Centers for Medicare and Medicaid Services.Advisory committee on ground ambulance and patient billing (GAPB).Patient Advocate Foundation.What does an approved pre-authorization mean?HealthCare.gov.How to appeal an insurance company decision.U.S. Health and Human Services.Cancellations & appeals.HealthCare,gov.External review.
11 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Pollitz, Karen, et al. Kaiser Family Foundation.Consumer survey highlights problems with denied health insurance claims.National Academy for State Health Policy.State definitions of medical necessity under the Medicaid EPSDT benefit.Burns J.There’s a better way to do step therapy.Manag Care. 2018;27(11):12–14.Consumer Reports.Hazardous health plans - coverage gaps can leave you in big trouble.MedlinePlus.Managed care.HealthCare.gov.Balance billing.Centers for Medicare and Medicaid Services.Advisory committee on ground ambulance and patient billing (GAPB).Patient Advocate Foundation.What does an approved pre-authorization mean?HealthCare.gov.How to appeal an insurance company decision.U.S. Health and Human Services.Cancellations & appeals.HealthCare,gov.External review.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Pollitz, Karen, et al. Kaiser Family Foundation.Consumer survey highlights problems with denied health insurance claims.National Academy for State Health Policy.State definitions of medical necessity under the Medicaid EPSDT benefit.Burns J.There’s a better way to do step therapy.Manag Care. 2018;27(11):12–14.Consumer Reports.Hazardous health plans - coverage gaps can leave you in big trouble.MedlinePlus.Managed care.HealthCare.gov.Balance billing.Centers for Medicare and Medicaid Services.Advisory committee on ground ambulance and patient billing (GAPB).Patient Advocate Foundation.What does an approved pre-authorization mean?HealthCare.gov.How to appeal an insurance company decision.U.S. Health and Human Services.Cancellations & appeals.HealthCare,gov.External review.
Pollitz, Karen, et al. Kaiser Family Foundation.Consumer survey highlights problems with denied health insurance claims.
National Academy for State Health Policy.State definitions of medical necessity under the Medicaid EPSDT benefit.
Burns J.There’s a better way to do step therapy.Manag Care. 2018;27(11):12–14.
Consumer Reports.Hazardous health plans - coverage gaps can leave you in big trouble.
MedlinePlus.Managed care.
HealthCare.gov.Balance billing.
Centers for Medicare and Medicaid Services.Advisory committee on ground ambulance and patient billing (GAPB).
Patient Advocate Foundation.What does an approved pre-authorization mean?
HealthCare.gov.How to appeal an insurance company decision.
U.S. Health and Human Services.Cancellations & appeals.
HealthCare,gov.External review.
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