July 13, 2020

Appeal Tools

 The US Department of Labor estimates that about 1 in 7 claims to employer health insurance plans are initially denied. One patient advocate says that she wins 80% of appeals. Yet only 4% of denials are appealed. So why not go for it?  In its simplest form, this is what it looks like:

To break it down further, after the original claim denial, there is the first level internal appeal. Then, there is usually a second level internal appeal. This review takes place in a different department, and there is at least somewhat of a chance to overturn the first adverse decision/denial.

If a second level of appeal is denied, there is always an option to file the next level to the Commissioner of Insurance or the Third Party Benefit Administrator (TPA). The deciding factor here is the type of policy the person have. Fully funded insurance policies are appealed to the Insurance Commissioner, and self-funded policies are appealed to the TPA:

 Question:    Fully-funded Plan: Self-Funded Plan:
Who decides on the internal 
appeals process?
Your health insurance providerThird-party administrator (TPA) working on behalf of the self-funded employer 
Who conducts internal appeals?Reviewers employed by your health insurance provider or an IROClinical reviewers working for a third-party administrator or an IRO
Who regulates external reviews?Your state insurance commissioner except for Alabama, Mississippi, Nebraska and North Dakota which follow federal external review 
Regulated by ERISA under the U.S. Department of Labor
 Who conducts external reviews? An IRO approved by your state 
insurance commission
An IRO accredited by URAC or other credentialing organization
Your Coverage and Your Rights

Medical claims can be denied for many reasons. In most cases the reason for the denial is listed by codes right next to the service line. At the bottom of each Explanation of Benefits (EOB) there should be a code explanation. If the explanation is not listed or you don’t understand the first thing to do is find out or clarify what is being denied and why.

Once you've armed yourself with the appropriate information, you can decide whether your complaint is worth pursuing, and you'll be able to point to the relevant part of the contract when arguing that the health plan erred in denying coverage.There are three denial types that determine, in general, what your next action should be:

Coverage - when the denial states that your policy does not cover this service, period.

Technical - mainly denied for timely filing or coding issues.

Medical - denied as not medically necessary for your specific condition.

The key to success in any appeal is knowing which of the above your dealing with and tailoring your appeal accordingly. Review your plan contract (booklet). It contains details on how to file for an internal review. Be sure to comply with all of the requirements. Otherwise you'll give the plan an easy way to deny your request. Know the time limits because the time period in which you must file your appeal varies between health plans. File your appeal within the specified period. If you miss the deadline, you may lose your right to fight the decision, and you may be barred from a later external review as well. 

Customer Service The first avenue if you disagree with a health plan coverage decision is calling customer service. Customer service agents may be able to reverse an erroneous charge or approve services that were originally denied. By calling customer service, you can ask questions about a denial and full explanation should be given. During this phone call you may find out that the insurance made a mistake and your phone call of inquiry can prompt the customer service person to send back the claim for reprocessing. If the agent can't help, ask to speak with a supervisor.
You're not out of the woods yet even if they say it will be reprocessed. Things can still go wrong and your denial could still be upheld with a new denial EOB. So, the best thing to do in this situation is to mark your calendar in 30 days, note the date of your phone call, the name of the person you spoke with and if any reference number given. This way in 30 days you can follow up with a second call if the claim has not been paid:

  • Create a phone log with:
  1. The type of contact you made, including the telephone number
  2. The date
  3. Who you talked to
  4. What was said regarding
    medical claim appeal preparation

  • Gather personal information:
  1. Patient contact information (name, mailing address, phone number)
  2. Contact information for the person representing, if applicable (such as an attorney, parent or guardian
  3. Name of the company or group providing the health plan
  4. Policy number and, if it applies, claim numbers
  5. If the plan is through an employer, the name and location of the employer
  6. Names of doctors or providers who provided care or who gave an opinion or recommendation
  7. Any explanation of treatment or services from the medical provider's office.
  8. Criteria the insurance company used to base its decision. This is shared with the doctor in order to provide the information needed for the service to be covered.
  9. Any rsearch to support the opinion that the denial should be overturned

The Internal Review  Once the reason for denial is fully understood, you can file for the first level appeal if appropriate. It's important to note that an appeal is usually unnecessary for the "technical" denial reasons listed above. You simply need to refile the claim with proof oof timely filing or the corrected codes with treatment notes to verify them.

All health plans are required to provide the opportunity for this internal appeal if a plan participant disputes a course of action. So if you disagree with a decision made by your health plan, an internal appeal is an excellent first step toward getting the results you're looking for.In general, the body of your letter needs to explain what taken place and why this claim should be paid. Try to be clear and free of emotion. Accusing a person reading this letter of bias, etc. will not help. The closing sentence is a repeat of your demand for payment. If you're not comfortable composing your own letter, use the templates attached to this page. 
Always be sure to have the correct appeals address for your insurance. Letters and faxes often go to a specific department, so sending a letter to the wrong address can further delay the answer. Some of these companies are so big that your letter can be easily misplaced.  
Submit Documents  Be sure to include all documents that support your position with your appeal letter. These may include:
  • additional research on your medical condition (including treatment guidelines and medical journal articles)
  • additional research on the cost-effectiveness of the applicable treatment or procedure, and
  • evidence of payment (for billing disputes).
  • medical records
  • letters from your doctors (i.e. explaining why certain treatment or procedure should be covered)
  • second opinions (opinions from doctors other than your own as to what treatment or procedure is necessary)
  • explanation of benefit (EOB) forms applicable to your claim
  • references to the applicable sections of the Evidence of Coverage
  • The Hearing  Some health plans hold a hearing at the second level of internal appeal. Get someone -- a friend, family member, advocate, or even a lawyer -- to help you prepare for the hearing. This person can also attend the hearing to support you. Sometimes arbitration replaces one of the review levels in an internal appeal. In arbitration, you and the health plan make arguments and present evidence to a neutral third party (the arbitrator) who then makes a decision.

    The health plan is required to respond to your appeal within a certain time frame. Again, check the Evidence of Coverage for specific time limits under your plan. Federal law governs response times for certain health plans: 30 days if the disputed medical service has not been provided and 60 days if it has been provided.
    You can ask for an expedited response if you feel you will suffer adverse health effects by not receiving treatment under the timelines specified in your plan. Usually, the health plan must respond within 72 hours to an expedited appeal. If your request is denied at both levels of the internal appeal process, you are then eligible for an external review. 

    The External Review  The Uniform Health Carrier External Review Model Act states that upon completion of the internal review, independent review of coverage denials based upon the limited areas of medical necessity or the experimental or investigational nature of the proposed or rendered service or supply, adverse coverage determinations, or recisions, plans must have an external review process.


    The procedures in an external review of a health dispute vary by state. That means you'll have to review your policy to find out what types of disputes are eligible for review, the time limits for bringing a complaint, and how to proceed with your appeal. In most cases, you must complete the internal review process before you can ask for an external review. The external review is usually available for free or a small charge. Most states allow the consumer to give written authorization to let a third party (for example, a medical provider) file the appeal.  

    Prepare and File Correctly  The requirements of the external review process are dependent upon the type of plan as stated above. Fully funded insurance policies are appealed to the Insurance Commissioner, and self-funded policies are appealed to the the plan administrator: 

    In most states, the review panel does not conduct a hearing. Instead, you must submit all your evidence and arguments in writing. Be sure to read the external review requirements carefully and submit everything that is requested. There are some limitations. For instance, in most states, the consumer cannot file an external review if:
    • the consumer did not complete the internal review process before seeking external review
    • the issue does not involve a determination of medical necessity, and
    • the consumer did not provide all requested information (for example, the patient failed to submit consent forms).

    So If you want the panel to consider your appeal, make sure you have met all preconditions and that your issue is appropriate for external review.

    Related Resources:
    1. "How to Appeal a Health Insurance Denial" , Wall Street Journal (2010).
    2. "Appealing Health Plan Decisions", Healthcare.gov (2010).

    How a major health insurance company failed a paying patient through repeated denials. No amount of medical claim appeal preparation could save her. She wanted us to ask ourselves why many of our politicians deny us the same coverage they give themselves?