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The Health Claim Game

Here's how to fight back when your insurance company denies a claim.

Every time Milton Hillery, 76, gets a letter from his health insurer, he worries: Has my claim been rejected again? Is this another questionnaire asking if I have other coverage?

"I fill out the questionnaire, send it back, and three weeks later I get another one," says the retired Maine educator, who pays for a private plan to supplement his Medicare coverage. "You can call the company and say, 'I've responded,' and you're politely told it's not in the records, but they'll take care of it. Weeks later you get the same questionnaire. It's pretty clear to me, delaying payment is their intent."

For Hillery—who has diabetes, among other conditions—tussling with his insurer is an annoyance. For Arizona resident Theresa Rattei, it became a life-and-death struggle.

Rattei, 51, was diagnosed with a rare cancer in 2006 and had chemotherapy twice, with little success. In January 2008 her doctor prescribed a radiation treatment, but the insurer managing Rattei's health plan deemed it experimental—and thus not covered.

The problem: Her cancer was in a bile duct just outside the liver. Had it been in the liver, the treatment would have been approved. The difference is "a matter of millimeters," says Rattei.

“Don't accept the company's word as final. It is not.”

Margie Griffin of the Patient Advocate Foundation (800-532-5274) helped Rattei appeal to her husband's employer—employers being the real payers of claims under what are called self-funded plans. It took eight months of battling to win approval of the treatment as a medical necessity, and the radiation did halt the cancer's advance for a while. Though now, Rattei reports, "two spots have grown in my lungs."

The debate over health care reform may revolve around the uninsured, yet even for Americans with insurance, coverage often falls short. Medical debt caused a staggering 62 percent of personal-bankruptcy filings in 2007—and three-quarters of these filers had some health coverage. And as congressional hearings in June showed, some insurers revoke the policies of their costliest customers—the seriously ill.

Still, the most frequent outrage in health insurance may be the rejected claim. The Department of Labor estimates that about one claim in seven made under the employer health plans that it oversees is initially denied—about 200 million claims out of the 1.4 billion submitted yearly. The reasons can range from a simple paperwork error, such as an incorrect diagnosis code, to the more contentious finding that a procedure is not medically necessary.

"We think some companies are probably denying claims, counting on the hassle factor, [so] that people will just go ahead and pay out of their own pockets," says Kansas Insurance Commissioner Sandy Praeger.

Patient advocates say insurance companies have become increasingly aggressive in denying claims, especially expensive treatments for diseases such as Parkinson's and cancer. "We're seeing more high-dollar-value claims rejected than before, for categories of illnesses that had historically been pretty sacrosanct," says Kevin Lembo, who as Connecticut's health care advocate helps families deal with insurers. Lembo's advice: "Don't accept the insurance company's word as final. It is not, nor should it be."

Connecticut is among 46 states with procedures for the independent review of denials—and about half of those appeals are successful. Yet too few denials are appealed, says Lembo: "Ninety-six percent walk away."

The key to success is amassing a factual record that shows how your doctor determined that the treatment in question was needed. Until you have that evidence, resist the impulse to pick up the phone and simply demand reconsideration, says Jennifer C. Jaff, who directs Advocacy for Patients with Chronic Illness (860-674-1370). "If you just say, 'I want to appeal—I really need this,' you're not giving the company anything it didn't have the first time it reviewed your claim," she says.

Instead, build your case before appealing. Jaff says she wins about 80 percent of appeals. "And if we're winning about 80 percent of the time, then insurance companies are denying claims way too often."

To Make Insurers Pay


1. Don't pay the bill.
2. Get a reason for the denial in writing.
3. Review and follow your plan's rules.

...Make the easy fixes...
• Missing information? Fill it in.
• Coding mistake? Have your doctor fix it.

...And assess other reasons for the denial.
Health care reformers want to end these exceptions, but for now they are hard to overcome:
• Preexisting condition
• Lifetime-benefit cap
• Change of employer, so coverage was delayed

These may be worth challenging:
• No network facility or physician was available
• Drug wasn't FDA-approved for your illness
• Treatment was deemed unnecessary or unproven


1. Check the back of your denial notice to see how long you have to file—it's usually 180 days.
2. Gather objective evidence of medical necessity, such as test results and prior failed treatments.
3. Gather journal articles showing the treatment is safe, effective.
4. File the request in writing (certified mail, return receipt).


• A nonprofit patient advocate (your state's insurance regulator or a disease association can suggest names)
• A lawyer if there's a large sum of money at stake and you might end up in court.


If yours is a fully insured plan—that is, the insurer pays the claims. (Though insurers administer all kinds of health plans, roughly half are self-funded, meaning your employer pays the claims.) You have a fully insured policy if you buy insurance on your own.

To appeal a final rejection by a fully insured plan...
Go to your state insurance regulator.

To appeal a final rejection by a self-funded plan...
You will likely need to go to court, though your state insurance regulator can sometimes jawbone on your behalf.

Caroline E. Mayer covers consumer issues from Virginia.

For black-and-white reprints of this article call 866-888-3723.


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