After a medical emergency last year, I was shocked when I received a hospital bill for over $15,000. I had good insurance and thought my company would cover it. I was about to set up a payment plan with the hospital when I decided it couldn’t hurt to call the hospital and ask about the bill.
And I’m so glad I did.
Health insurance claim: denied
Many people just pay the total due because they think it’s what they owe, but it’s not always so simple. You see, the hospital had assumed I didn’t have insurance and issued me a bill as a self-pay patient. I gave them my insurance information and received a new bill a few weeks later for just 10 percent of the original.
Medical bills are one of the most common causes of bankruptcy, affecting millions of people each year. The people experiencing financial hardships after a health scare are not always the uninsured; many people have health insurance and still face hefty bills because of claim denials.
But you might be able to fight your health insurance company to cover your bills, even if they dismissed your claims initially. Keep reading to learn all about the insurance appeals process and what you can do to be your own advocate.
5 common denials and how to start the appeals process
Insurance companies reject approximately 200 million claims each year for a variety of reasons, according to AARP. But instead of accepting the denial and paying the bill yourself, consider going through the appeals process. In fact, if you dispute your insurance company’ decision, you have a 50 percent chance of winning, according to Kaiser Health News.
“In addition to the high error rate by both payers and providers, it is important to recognize that health insurance companies — even the non-profits — are in the business of denying claims. Claims denial lies at the core of insurance companies’ business models,” says Dr. R. Ruth Linden, president of Tree of Life Health Advocates.
But in many cases, you can reverse the decision. Here are the reasons for five of the most common denials and how you can fight them.
1. The hospital sent the claim to the wrong insurer
According to Dr. Linden, the medical provider sending your information to the wrong insurer is one of the most common reasons for denial.
Before paying the bill, check the documents to make sure your doctor sent your information to the right company. If you think there’s been an error, call the billing company right away and provide them with your updated insurance.
They will send you a new bill. This can potentially save you hundreds or even thousands of dollars.
2. The insurer excludes certain procedures
Some companies exclude certain procedures or services, such as vision exams, under a standard medical insurance policy.
However, that exclusion may not be accurate. For example, many companies will cover a vision exam if a doctor says it’s necessary after undergoing surgery, like for cataracts. Collect documentation from your doctor on the medical necessity of an exam or treatment and submit it with your appeal.
3. Procedure or device was cosmetic
I have alopecia, which causes large amounts of my hair to fall out. When I bought a wig — which can be very expensive — and submitted my receipt, my insurance company denied my claim, saying it was a cosmetic device.
Dejected, I talked about it with my doctor at my next visit. Surprisingly, she said this was a very frequent occurrence, and there was an easy solution. She wrote me a note saying I needed a “cranial prosthesis.” Then, my insurance company approved my claim, and I was reimbursed for the cost of the wig.
That’s a common solution for denials based on a procedure or device that is cosmetic in nature. But in many cases, you can get the denial overturned if your doctor can submit documentation that it is indeed medically necessary.
4. Untimely filing
Your insurance company may require you to submit your bill within a certain timeframe. If you get a denial saying the bill was sent in too late, contact the hospital or medical provider’s office.
If they cannot prove that they submitted your bill in a timely fashion, you are not responsible for the charges and they would need to discount the bill.
5. Human error
Simple errors can cause many claim denials accidentally.
“For example, the claim submitted by the provider has an error (known as a transcription error) such as the digits are reversed in the consumer’s birthdate,” says Dr. Linden. “Or there is another sort of billing error, such as an incorrect diagnostic or point-of-service code, or information is missing from the claim.”
That’s why it’s so important to carefully check all of your information, including your contact details. Small errors can cause issues with your claim and can be easily corrected by contacting the billing company or your insurance provider and going through the appeals process.
Managing medical bills
Medical costs can be an extreme hardship. Before going ahead and paying that bill or setting up a payment plan, make sure you check all of your information. Contact your insurer if you don’t understand something and don’t be afraid to ask questions.
Companies deny claims often, sometimes out of error, and going through the appeals process can save you a lot of money.
For more information about managing medical expenses, learn five ways to handle medical debt without going broke.
Interested in a personal loan?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.75% – 16.24%1||$5,000 - $100,000|
|7.46% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|6.99% – 18.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|