If you felt ill visiting a doctor or hospital, having your health insurance claim denied is enough to make you feel sick all over again — especially if you’re stuck with a large medical bill as a result of a denial. Unfortunately, health insurance claim denials are on the rise, and some experts believe the Affordable Care Act (ACA) will be responsible for increasing the frequency of denied claims in the future as insurers try to contain costs and deal with the burdens of higher numbers of insured patients. Denials, many of which arise from bad faith practices, really start to add up, with the American Medical Association estimating that more than $43 billion could have been saved since 2010 if insurers had just consistently paid claims correctly.
When you file an insurance claim with an insurance company, by law, that company owes you a duty to act in good faith. Simply put, this means that the insurance company must not look for ways to escape its obligation to investigate the claim or to pay you. Doing so would constitute “bad faith” and claims or lawsuits based on bad faith may stem from one or more of a number of actions or inactions by the insurance company from denial of coverage to failure to negotiate a settlement. Under the ACA, a patient has the right to appeal an insurance claim denied by a health insurance company. Under that law, and applicable to any health plans issued after March 23, 2010, your insurance carrier must explain the claim decision within 72 hours for urgent medical situations, and within 15 days if you are seeking a pre-authorization for a procedure. For medical services that have already been performed, the window for response to your inquiry is 30 days.
The five most common reasons for claim denial by an insurance company are uncovered charges, referral or pre-authorization required, using an out-of-network provider, minor errors in data entry, and the wrong insurance company was billed for services. Factoring in an insurance company’s possible bad faith in honoring your health insurance agreement can only make matters worse.
Consumer Reports Medical Advisor, Dr. Orly Avitzur, offers patients a number of helpful suggestions for keeping your claim from being denied.
- Double-check that you submitted the correct personal information to your healthcare provider. When information doesn’t match your records, such as a birthdate, insurance companies will routinely deny claims.
- If your visit or service was denied, check to see whether the rejection is a result of incorrect billing codes being submitted. Incorrect medical billing codes are more common than you think, and can be an easy fix for getting your claim paid.
- Get preauthorized. Insurance companies may require that your provider submit a request for preauthorization explaining the need for a medical procedure or medication prior to treatment.
- Be certain that your provider is in your network. That is critical when you receive services from a hospital or medical center because not all departments necessarily accept the same plans.
However, if you still believe an insurer acted in bad faith by denying your claim, you may be entitled to compensation. Contact an experienced Colorado bad faith lawyer who can review your case and help recover the insurance benefits owed to you.