Health insurance claims - the problem-solution guide

A health insurance claim is a formal request submitted to an insurance company by a health care provider for medical services that are covered under the terms of the insurance policy. The insurance company reviews the claim, and if finds it valid, will make the corresponding payment to the provider.

How a health insurance claim works

Medical services that were carried out in emergency rooms, clinics, hospital floors and doctors' offices are recorded in health insurance claim forms with the use of codes known as Current Procedural Terminology or CPT.

Services that were carried out in hospital settings are recorded using ICD-9 codes. The term ICD-9 refers to the ninth revision of the International Classification of Diseases. For instance, you are diagnosed as suffering from migraine headache, on the health insurance claim will be recorded the code 346.90. In addition, another code will be recorded on the same claim for the actual examination procedure carried out by the doctor. If there were equipment used, the corresponding code will also be reflected on the claim.

The codes are used by all thus making it easy to identify what services were rendered and how much the insurance company will reimburse the provider for those services.

The health insurance claim form will contain the following information:

  • name of the patient
  • the insurance company
  • the policy and group number
  • whether the injury or illness is work-related
  • date of the service
  • the services that were carried out
  • corresponding codes
  • charges for each treatment or procedure.

The insurance company will conduct a review of the claim to check if there are errors and see if the services match the codes indicated therein. If the company finds no issue with the claim, it will send payment to the provider or reimburse the patient for the amount he paid in advance less any deductibles required from him.

Common reasons why health insurance claims are denied

  • Information about the patient is incorrect. The name could be spelled wrong, birthdate does not match, invalid or missing subscriber number, invalid or missing group number, etc.
  • Insurance coverage has elapsed.
  • Prior authorization not granted. Prior authorization is required for certain types of medicine (examples: higher doses of medicine that are covered by insurance, those used for treatment of non-life threatening condition, medicine deemed necessary by a doctor but are not covered by insurance, etc.)
  • Non-coverage of services.
  • Requests made in relation to medical records.
  • Benefits not properly coordinated. The reasons under this include: another policy is the designated primary insurance, missing Explanation of Benefits statement, the patient has not provided updated information to the insurance company.
  • Claims that are recorded as being related to a work-related or car accident. Some companies will deny the claim pending the processing of the claim on the car insurance or worker's insurance.
  • Invalid or missing codes.
  • Not filing within deadlines.
  • No record of referral by primary doctor on file. Some companies make this a requirement before services are rendered to the patient.

What to do when your health insurance claim is denied



Know your rights.

Under the Affordable Care Act of 2010, health insurance companies are required to follow certain standards when it comes to internal appeals and also with regards to external review procedures.

Internal appeals are carried out when a consumer requests the insurance company to establish if its initial denial on a claim was a correct decision.

External reviews, on the other hand, take place when the consumer requests an external body to determine if the denial is correct after the insurer has determined that it made the right decision.

The Act provides consumers with these rights:

  • The right to information as to why the company denied coverage. A company has to also let the consumer know what the process is when disputing decisions.
  • The right to make an appeal along with the right for a speedy process when the situation is deemed urgent.
  • The right to get an independent third-party to make a review of the company's decision. In this route, whatever is the decision made by the third-party will be the final one.


Be aware of the time period that the insurance company has to inform and explain to you when it denies fully or a portion of your claim.

  • For cases requiring pre-authorization, you should be notified within fifteen days.
  • In cases where medical services have already been rendered, the company has to notify you within thirty days.
  • In cases involving urgent care, the company has to notify you within seventy-two hours.

The information provided to you must include:

  • Explanation about your right to make an appeal.
  • When you request for it, the company has to provide you information related to the denial like the names of medical experts they consulted.
  • Information about your state's Consumer Assistance Program where you can get assistance with your appeal. Information on state CAPs can be found at ; click on "Get Help Using Insurance," and then "Managing Your Insurance," and then "Consumer Help."


Consider getting the help of health insurance consumer groups.

Aside from Consumer Assistance Programs, there are a number of non-profit as well as for profit groups that can help you with your appeal. These groups operate in many states. The website has a per-state list of these organizations. Go to and click on your state for information. Other sites that also provide similar resources include: , and .


Request for an internal appeal.

Write your insurance company a formal letter making the request. State in the letter that you are making an appeal to the denial. The company should provide you with the necessary forms. Be prepared to submit information that will back up your appeal like a letter from your physician.

For general cases, you are to file the appeal within one hundred eighty days or six months after notification of the company's denial on your claim.

If coverage is sponsored by your company, there may be a requirement for you to make 2 internal appeals prior to pursuing a review by a third party.

In urgent cases, independent reviews may be requested during the same time an internal appeal is undergoing.


Be aware of the time period for a decision on the internal appeal.

  • For cases requiring pre-authorization, the company has to inform you within thirty days.
  • For cases where medical services have already been rendered, the company should inform you within sixty days.
  • For urgent cases, the company has to inform you within seventy-two hours.


If the internal appeal still results to a denial, be prepared for an external review.

Depending on the state, the period for filing for an independent, third-party review may be as little as 60 days. In urgent cases, filing can be done while the internal appeal is ongoing.

Be aware that external review processes may either be state-run or administered by the federal government depending on the state you are in. Have a look at the Center for Consumer Information & Insurance Oversight website at , and then click on "External Appeals." The site provides contact information on the body that handles reviews per state.

Insurance companies that are under an external review process handled by the federal government may opt to take part in a one managed by the Dept. of Health and Human Services. If your plan is a participant in the HHS program, go to and click on "External Reviews" for details.

A company may also opt to contract out to eligible, independent third parties to undertake the review.

Another way to determine if a policy is eligible for review under the HHS program or if it is to be reviewed by a third party, is to have a look at the notice on adverse benefit determination. This notice should include instructions on filing for an external review. If you do not have this document, contact the member services department of your insurance company - you should find the contact number on your insurance ID card.


Prepare the necessary papers.

  • Communication that shows the company's denial of the claim.
  • Copy of the letter requesting the company to conduct the internal appeal.
  • All other documents provided to you by the company.
  • All documents you submitted to the insurance company.
  • Copy of the communication you signed when you opted to have a representative file an appeal on your behalf.
  • Any written records of communications between you and your insurance provider or the physician in relation to the internal appeal. Such record should reflect dates, times, names of people you communicated and their titles and the details of the conversation.
  • File original papers, submit only copies.
  • To help you record phone conversations and important notes, the website has prepared a sheet which you can use. Just go to the site and on the search bar type these keywords: appealing a denial of service, tracking sheet.


Await for the decision of the external reviewer.

Whatever is the decision, the insurance company has to abide by it.

What to do if you are denied health insurance due to a pre-existing condition

If you have a pre-existing medical condition and insurance companies deny you coverage, you can turn to the Pre-existing Condition Insurance Plan.

The PCIP is one of the important policies put forth by the Affordable Care Act. Under this plan, eligible consumers, regardless of their pre-existing health status, will enjoy a wide range of insurance benefits like specialty, primary and hospital care and also prescription medication. In-network services will be covered 100 percent and the consumer will not have to pay any deductible. Our guide "Health insurance and individuals with pre-existing medical conditions" covers eligibility and documentation requirements, types of options available and other key information about the PCIP program.

What to do if you are denied health insurance because of your weight

There are ways you can still get covered even if you are overweight or obese:

  • If you are a small business owner, you can get a group policy via the Chamber of Commerce in your locality.
  • Membership with an association or club may include the benefit if health insurance coverage.
  • If you are a college student, you can get a college health policy.
  • You can also get a policy through your spouse's company if you are married.
  • If none of the above applies to you, get advice from your state's insurance department, they may be able to help you get coverage.

What to do if you are denied health insurance due to pregnancy

The Affordable Care Act of 2010 will make it illegal for insurance companies to deny coverage because of pregnancy by the year 2014. Between then and now, pregnant women consumers can still get coverage under certain programs like the Health Insurance Program for Children, Medicaid, and High Risk pools implemented at the state level.

To help you find coverage, go to and follow the steps that apply to pregnant women. For state-based assistance, you can use the same site ( and click on "Managing Your Insurance," and then "Consumer Help."

How to avoid health insurance claim problems

  • Read and understand your insurance policy. Regularly review it and be sure you are aware of what is and is not covered. If there are matters that you have problems understanding, ask them out to your insurance carrier. Ensure that you get clear answers from them. Important sections you really need to understand are: limitations and exclusions of the policy and the process for appeals.
  • When you seek the services of medical provider, be sure that he understands what services are part of your policy. Always be aware that doctors handle many patients with each one having a different insurance company. So, never assume he knows the details of your coverage.
  • Be serious with the provisions of your policy. When it comes to medications or procedures where prior authorization is a requirement, then do not proceed without securing that authorization. Making assumptions could be disastrous for you later on.
  • Record each aspect of the process - from receiving services, getting authorization, billing, making claims, etc. Take down key information like dates of treatment, talks with your physician, actions recommended and implemented, phone calls made, individuals you talked to, etc.
  • Keep files of all documents from your physician and the insurance company. Have this kept in chronological fashion for easy retrieval.
  • If the provider is out of the network, ask first if they are amenable to full payments from your insurer.
  • For out of pocket claims which you can and want to be reimbursed, always file immediately.

Examples of health insurance claim problems and their solutions

  • Case of Maria Carr whose coverage for arthroscopic surgery was denied by her insurance company. This was reported on February 5, 2010 by

    According to the report, Carr's insurer, Unitedhealth, initially found the procedure done on a bone spur located on her hip as "experimental" and denied coverage for the initial bill of $21,225. Ms. Carr decided to fight the company's decision by providing proof from medical journals that validated the procedure as a safe and bona fide treatment. Because of her persistence, the company agreed to reimburse the expenses which was negotiated down to $12,282. Ms. Carr's share of the cost ended at only about $500.

  • The Huffington Post mentioned on April 2010 the case of Jerome Mitchell, a student found positive for the HIV virus.

    Mitchell's insurance company revoked his health coverage retroactively because it believed he knew beforehand that he had HIV. The company's decision, it was found out later, was based on an erroneous entry recorded by a nurse on Mitchell's records. The matter was brought to court and in the end the company was ordered by the Supreme Court of South Carolina to pay Mitchell $10 million for damages.

  • The case of erroneous entry which led to a denied claim for Ginny Akers's MRI. This matter was reported by

    Mr. Akers requested for a review of the denial and found out that name used in the claim was that of one of the MRI center's radiologists. The name used in the claim should have been that of the center itself.

  • The Los Angeles Times reported on June 23, 2011 a case involving a mother who was refused coverage of hospital services amounting to $7,500.

    The insurer denied the claim because no prior authorization was not secured for the mother's stay at a nearby hospital. The company also sent the baby a bill of $600 because, according to the insurer, the baby failed to inform them that he will staying in the hospital for a number of days. Someone advised the mother to file an internal appeal which she did even when she did not know that there is such a process. The company overturned its initial decision and granted the mother the claim.

  • The same Times article also reported the case of a patient diagnosed with lymphoma. She was charged $1,600 by the insurer because she used a private room.

    It so happened that all rooms in that particular hospital were private rooms. She needed someone from the hospital to support her claim. Unfortunately for her, no one from the hospital did despite a number of telephone calls made by her husband. When her bill was forwarded to a collection agency, she personally went to the hospital and asked to talk to someone about the issue. Only then did someone validated her argument with the insurance company. Eventually, the charges were removed.

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