The Health Insurance Appeal Letter: Overcoming Coverage Denials

Being denied by a health insurance company can be scary. Suddenly, you could be on the hook for thousands or tens of thousands of dollars in medical care. Don’t panic: you have the right to appeal the rejection. The starting point is the appeal of the health insurance company.

Let’s take a closer look at why claims are denied and what you can do about it, including two health insurance appeal templates.

What is a health insurance appeal letter?

Writing a Health Insurance Appeal Letter

When your health insurance company receives a request from your doctor or medical facility, it will review the request. The insurer can approve the claim and make payment. They can also deny the claim.

If the insurer refuses to approve payment for treatment, you will usually receive a denial notice or explanation of benefits, explaining that the claim has been denied and that you are responsible for paying the medical bill yourself.

This decision of your insurance company is not final. You can use a health insurance appeal to ask the insurer to reconsider. Depending on the reasons for the denial and your appeal, the insurer may change its decision and pay your bill.

🏥 More information: Our recent post dives into the stats how many Americans do not have health insurance and factors behind this problem.

Why claims are denied

Claims can be denied for many different reasons. One of the first things you need to do before submitting an appeal to your insurer is to make sure you understand why your claim was denied. It is important to understand why your claim was denied before you prepare your health insurance appeal letter.

Common reasons for rejection include:

Timely submission

One of the simplest reasons your insurance company could deny a claim is because your health care provider was slow to fill out the paperwork. For most insurers, the period ranges from 90 days to one year from the date of service provision, but some have shorter periods.

🏥 More information: Explore our expert tips for the best healthcare stocks and ETFs consider for your investment portfolio.

Uncovered services

Not every insurance plan covers every type of medical care or every medical service. Under the Affordable Care Act, certain basic health benefits must be included in your plan, but some things can be excluded.

Some plans also work around the ACA rules, so you may find unexpected exemptions. For example, your plan may not cover prescriptions or mental health care.

🥇 More information: Explore your options with our guide the best health insurance for the self-employed in 2023.

Lack of prior authorization

Some insurance plans require you to cooperate primary care provider before seeking professional help. There are also plans that get certain services pre-authorized.

If you want to have a non-emergency blood test to check for a specific disease, you may need to have it done by your insurance company to get permission before ordering the test. If you don’t follow these rules and get pre-authorization for certain services, your insurer may deny your claim.

Parcel services

Health care, especially when you have a problem serious enough to require an emergency room visit or hospital stay, can be incredibly complicated. Many services and tests are closely linked, so insurers may consider them effectively bundled together.

If you go to the emergency room, the doctors there will likely run a series of tests to assess your condition. If they present your insurer with a bill that includes a line item for your assessment and then separate line items for multiple underlying diagnoses, the insurer may deny claims for those diagnoses because they believe they should be included in the standard assessment.

Data discrepancies or paperwork errors

Simple paperwork problems or data inconsistencies can also be a source of rejection. If your doctor files a claim with your insurance company and lists your name as “Jim Smith” when your name is actually “James Smith,” it could result in a denial.

Entering incorrect treatment codes or accidentally entering the wrong treatments or tests can also result in denial.

Network problems

Depending on your insurance plan, you may need to see specific in-network health care providers. Out-of-network providers will not be covered. If you receive care at an out-of-network facility, expect your claim to be denied.

🏥 More information: Learn how to secure health insurance when self-employed with our handy guide to guide you through the entire process.

Appeal levels

If your insurer denies your claim, you shouldn’t panic just yet. It can be scary to suddenly owe a large amount of money, but you still have it possibility to appeal the decision.

Insurers are required by law to offer two levels of appeal: internal and external. You will need to initiate both appeal processes with a health insurance appeal.

Internal appeal

The first level of appeal is the internal appeal. This is a request to your insurance company to look at your claim again and make a “full and fair review” of the decision. In urgent situations, the insurance company must speed up the revisions.

When filing an appeal, you must write the appeal of the health insurance company. It must contain your name, claim number and insurance identification number. You can also provide supporting evidence, such as a letter from your doctor explaining why you think the treatment should be covered.

If you need help filing, you can work with the Consumer Assistance Program in your state.

You have 180 days from receiving the claim denial notice to file a health insurance appeal. After you apply, your insurer must complete the appeal within 30 days if you have not yet received service, or within 60 days if you have already received service.

External review

Requesting an outside review allows you to take the decision out of your insurance company’s hands and ask a third party to review your claim. Within four months of receiving the final decision that your claim has been denied, you must file an appeal with the health insurance company for an external review. You can also work with your doctor or other representative to apply on your behalf.

The external review process will vary depending on your state of residence. In some cases, the federal government’s Department of Health and Human Services or an independent review organization will oversee the process. Some states have a process that goes beyond the minimum federal consumer protection standards and will govern that process.

External reviews are more limited in scope than internal appeals. You can only request an external review:

  • Denials involving medical judgment where you or your provider disagree with your insurer
  • A refusal that includes a determination that the treatment provided or requested is experimental or investigational
  • Cancellation of cover based on your insurer’s claim that you provided false or incomplete information when you applied for cover

Standard external reviews take no more than 45 days, while expedited external reviews take a maximum of 72 hours or less, depending on the medical urgency of your case.

In most cases, external reviews are free, although insurers that contract with an independent review organization or use the state review process may charge a maximum of $25 to process the review.

💵 More information: Learn how to negotiate a medical bill efficiently with our step-by-step guide to reducing healthcare costs.

Letter templates

If you need to appeal a health insurance denial, you can use one of these health insurance appeal templates to help you get started. Consider sending the letter by registered mail to make sure you receive it.

Health Insurance Appeal Template 1: Internal Review

To whom it may concern

My name is (Name) and I am a policyholder with (Insurance Company.) I am writing this letter to appeal the denial of a claim to (Administration). I received an explanation of benefits dated (Date) and stating (Reason for denial.)

Explain in a paragraph or two why you believe the claim was denied in error. For example: “On 10/15/2022 I was diagnosed with chronic back pain and my (doctor’s name) at (facility name) recommended (treatment name)

Please read the attached documents and review your previous decision to authorize coverage (Procedure) as this treatment is necessary for my health. If you need any additional information to provide coverage, please contact me at (Contact Information) or my doctor at (Physician Contact Information.)

Thank you for your attention to this matter.

(Your Name) (Your Address)

Enclosed in this letter:

(Including list of documents and supporting evidence)

Health Insurance Appeal Template 2: External Review

To whom it may concern

I am writing to request an external review of the final benefit decision I received on (Date), which I have attached to this appeal, by an independent review organization.

I filed an internal appeal on (Date) in response to the decision to deny my claim. Your review board returned a decision affirming the original decision not to cover this claim.

Explain why you are making this request for external review, including any new relevant information. Keep this part factual rather than trying to appeal to emotions.

Thank you for your attention. I look forward to your quick reply.

(Your Name) (Your Address)

Enclosed in this letter:

(Including list of documents and supporting evidence)

Work with your provider

Dealing with health insurance denials can be difficult, especially if they refuse to cover treatment that your doctor thinks is necessary. Don’t be afraid to ask your doctor for help in communicating with the insurance company. A letter from your doctor explaining why the care is necessary could help.

In the worst case scenario, if your insurer still refuses to approve your claim, you should contact the provider’s billing department and take action. Many health care providers are able to significantly lower your bill or help set up payment plans if you are having trouble paying for your care.

Leave a Comment