How to Handle a Health Insurance Claim Dispute

It just came in the mail – another form letter from your insurance carrier – this time stating that they are denying your insurance claim. You owe thousands in doctor and hospital bills, most of which are overdue, and now you don’t have money to pay these bills and your rent. What are you supposed to do?

What to do When Your Claim is Denied?

1. Don’t give up. It’s sad, but many insurance companies deny a certain percentage of claims, figuring that most insureds will just give up. They have an incentive to make it hard for you to get paid. For every insured who gives up, the insurer gets to keep the money it was supposed to pay on the claim. And every dollar the insurer doesn’t have to pay in claims is another dollar toward the all-important bottom line. So don’t do it; don’t give up. Dealing with insurance companies is frustrating and takes time, but a little persistence can make the difference between a denial and payment.

2. Be polite and professional. It goes without saying, but remember that, even though you are dealing with an insurance company, real people are making decisions about your claim. So be polite, courteous, and professional . . . it will go a long way toward helping resolve the matter.

3. Get a copy of your policy. You can’t make intelligent decisions or understand your rights if you don’t know what your policy says. Remember, an insurance policy is simply a contract between you and the insurance company. There generally will be a policy and a summary description of the plan. Get copies from your carrier and your employer. And read them.

4. Do everything in writing. This might be the most important rule. In the world of insurance, a telephone call means almost nothing. If a telephone conversation, or a promise, or advice about your claim are not documented in writing, the insurer can always deny that it happened. So after you get off the telephone with your carrier, and they just told you they’d pay your claim after you send in some record or form, do this: make a note of your call write down exactly what was said, who you spoke with, and the date and time of the call. Then, when you send in the form, include a cover letter recounting the the details of the call the date, the time, who you spoke with, what they said and promised. That way, the carrier cannot deny that it happened.

5. Make the carrier tell you why. In most states, the insurer is required to give you certain information when they deny your claim. Typically, the insurer should provide:

-A statement of specific medical and scientific reason for denial.
-A statement identifying the provision that excludes treatment.
-The name, state of licensing, medical license number, and title of the
person making the denial decision.
-A description of alternative treatment, services, or supplies that are
covered, if any.
-Instructions for initiating internal appeals of denial, including whether
your appeal has to be in writing, time limits, schedules for filing, and
the name and phone number of a contact person.
-Instructions for filing an external request for review if the denial is
upheld in the internal review.

If the insurance company does not provide this information with your denial, ask them for it, in writing.

6. Ask for your doctor’s help. Many times, health plans grant or deny coverage based on whether a treatment is necessary for your well being and appropriate for your condition. Ask your doctor to contact your health plan’s decision maker and explain why the treatment was necessary. One call from the doctor often will solve the problem.

7. Keep your eye on your watch. After your claim is denied, almost every health plan allows you to appeal the decision. But often you have a only a short time to appeal sometimes as short as 60 days. Get a copy of your plan’s appeal procedure and review it carefully.

8. Contact the your state’s Department of Insurance. If you believe your insurer is being unfair, contact your state’s Department of Insurance and lodge a complaint. Each state’s Department of Insurance has a division dedicated to handling consumer complaints. For example, the California Department of Insurance’s Consumer Services Division can be contacted here.

9. Speak to an experienced attorney. Gather up all of the documents relating to your claim and find an attorney in your state who specializes in insurance law. Ask your family and friends a referral or visit a directory such as In many cases, an experienced attorney may be able to help you solve your problem with a letter or two.

10. Don’t give up. I’ll end where I began. Insurers bank on some policyholders giving up. Don’t be one of them. Be diligent, be professional, and be firm. Remember, sometimes insurance companies are right. But make sure they are before you give up on your and your family’s rights.