How To Appeal Health Insurance Claim Denials

Common Reasons Claims Are Denied, and How to Write a Claims Appeal Letter

Woman doing paperwork and using a laptop in bed
Photo:

Getty Images

Sometimes you must fight for your rights when it comes to health insurance. Mistakes can cause valid claims to be denied, but you need the facts if you're going to launch a winning appeal. All health insurers have ways to appeal unpaid claims. You may be covered after going through the process if you know how to fight a denied health insurance claim.

Key Takeaways

  • You can't mount a strong appeal if you don't know why your claim was denied.
  • An effective appeal letter contains a clear opening statement, an explanation of your medical condition, and supporting data from your physician.
  • It may not be worth the effort of writing an appeal if your claim was denied because it clearly did not fall within what your policy covers.

Denied Claims vs. Rejected Claims

A health insurance claim denial occurs when an insurance company does not approve payment for a specific claim. The health insurer decides not to pay for a procedure, test, or prescription.

A rejected claim can be easy to correct. This is a claim that's not processed because incorrect information has been submitted with the health insurance claim form. Rejected claims don't have to be appealed. You can simply correct the error. Resubmit the right information and your insurance company should begin to process the claim.

5 Reasons Why a Health Insurance Claim Could Be Denied

Knowing why your health insurance claim was denied is key because it tells you whether you can appeal the decision. If your appeal succeeds, the company must pay for the claim even though it was denied at first.

Health insurance claims are denied for five common reasons:

  1. There may be incomplete or missing information in the submitted claim documents, or there could be medical billing errors.
  2. Your health insurance plan might not cover what you're claiming, or the procedure might not be deemed medically necessary.
  3. You may have maxed out the coverage limits in your plan.
  4. The drug or therapy is off-formulary and not part of your health plan.
  5. You may have used out-of-network services or used your health insurance out of state when your health plan requires "in-network" providers.

Note

First learn why your claim was denied. It could be an error in how the claim was entered into the insurance system. Maybe a claims processing agent made a mistake. There could be information missing. Do your research.

How To Fight a Health Insurance Claim Decision

You'll receive a denial notice if your health insurance claim is denied. The notice should tell you how long you have to appeal the decision. It is crucial that you not miss the deadline.

Find out why your claim was denied before you begin the appeal. Appeals won't always make sense if your plan clearly states that the service you need isn't covered, you were out of network, or you've maxed out your coverage limit for the year.

Review your insurer's website if you're not sure. You can also call to better understand your health insurance policy coverage and the reason for your claim denial.

Write an Appeal Letter To Fight a Claim Denial

Writing an appeal letter for your denied health insurance claim is a matter of sharing the proper information so you can have your case looked at as soon as possible. The insurance company may find it hard to review your appeal if you request one but can't explain why your claim was denied.

Note

Talk with someone in the claims department to make sure you understand the reason for the denial and how their appeal process works.

Follow the appeal procedure exactly as it's outlined to avoid delays. Doublecheck it before you send it. You want the requested information to go to the right department or person.

What Your Appeal Letter Should Include

A health insurance claim denial can frustrate you to tears but keep the emotion out of it. A simple letter that gets straight to the point is the best approach. Your appeal letter should be "matter of fact" in tone. Include any information that your insurance company tells you is needed and be sure to cover these points:

Opening Statement

State why you 're writing and what service, treatment, or therapy was denied. Include the reason for the denial. Your intro can state: "I am writing about Claim Number 123456ABC. I received a letter denying my claim for XYZ services for this reason: ______________. I would like to appeal this decision."

Explain Your Health Condition

Outline your medical history and health problems. Explain why you need the treatment and why you believe it's medically necessary. List any treatments you've already tried. Explain why you believe that the current treatment may be a solution.

Get a Doctor To Support You

You'll need a doctor's note. Ask your physician to support you with information that verifies your statements about your health and the treatment. Provide documentation from recognized institutions, such as hospitals and medical schools, that shows it as part of a recognized treatment plan if the treatment is new.

Send your appeal on time by certified mail. You'll want proof that you submitted your request within the time limit. Keep records of all emails showing the time it was sent if appeals are only accepted online.

The key is to understand your coverage and why your claim was denied when you're looking to appeal a health insurance claim denial.

Frequently Asked Questions (FAQs)

How often are health insurance claims rejected?

Insurers who work with HealthCare.gov are required to provide a greater level of transparency than some other health care groups, so the best data on claim rejections comes from those insurers. Roughly 18% of in-network claims were denied in 2020.

How do you get affordable health insurance?

You can consider using government programs if you don't have access to affordable health insurance through an employer. The Obamacare health insurance marketplace can connect you with insurers while helping you understand the tax subsidies that are available to help you pay for premiums. Check with your state government to see whether you qualify for Medicaid or another state-level insurance program. You may also be able to be added to their plan at a reasonable price if a family member has good health insurance.

Was this page helpful?
Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Patient Advocate Foundation. "How to Appeal Health Insurance Claim Denials."

  2. Kaiser Family Foundation. "Claims Denials and Appeals in ACA Marketplace Plans."

Related Articles