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Dec 2015

Patients Have Right to Fight – and Win – Health Plan Denial, Termination of Coverage

Right after an audit notice from the Internal Revenue Service, the next worst piece of mail – and one that is far more likely – is the health plan denial of services you received from a physician or hospital. Many health plans know that there are a healthy percentage of patients who will not even fight or appeal a denial of payment for their services or termination of their coverage. Passing the proverbial buck to the health care consumer helps a health plan’s financial bottom line appease Wall Street.

However, patients have appeal rights and statistics show the denied health care consumer should take advantage of the process. A 2011 U.S. Government Accountability Office report sampled data from a several states and found that patients were successful 39 to 59 percent of the time when they appealed an adverse decision directly to their health insurer. In analyzing data from California, Capital Public Radio found that about half the time a patient appeals a denied health claim to the state’s regulators, the patient was victorious. In the GAO report, when the patient appealed to a third party, the patients also were successful in getting the denial overturned (from 23 percent in Ohio to 54 percent in Maryland).

Under the Affordable Care Act, a patient has the right to appeal a health insurance company’s decision to deny payment for a claim or to terminate your health coverage. Patients may appeal their insurance company’s denial or termination decision through an “internal appeal”. This direct appeal is when a patient asks his or her insurance company to do a “full and fair” review of the plan’s decision. This means that the decision, which should be rendered within 30 days for non-urgent care yet to be received to within 72 hours of said appeal for urgent care, should be detailed if adverse. The health plan needs to clearly articulate exactly why the patient’s coverage was terminated or the request for said services to be rendered or reimbursed was denied.

For care that has already been received by the patient, most health plans are required to send an internal appeal decision within 60 days of receiving said appeal. Many states require even faster turnaround times for already rendered care that the health plan denied reimbursement to a hospital of physician. A patient should also work closely with their physician and/or hospital on a denial as the provider may be submitting its own appeal as well. Very often a dual appeal by both a patient and provider increases the likelihood of having a health plan overturn its initial decision.

If the insurance plan still denies payment to the doctor/hospital or coverage for services, the ACA permits patients to have an independent third party decide to uphold or overturn the plan’s decision. This final step is referred to as an “external review.” The patient’s health plan often outlines these processes in the policy. Very often, the health plan has agreed to pay for these services.

Unfortunately, while this “third-party” tab being picked up by a health plan looks like a benefit to the patient, there is cause for great concern as the health plan’s payment to an “independent” review agency creates an inherent conflict-of-interest scenario. How often will an independent agency be used by a health plan if they consistently  agree with  the patient? The discrepancy in the GAO report, where Maryland patients were 54 percent successful in external appeals versus Ohio patients finding just 23 percent success rate, raises eyebrows.

Many states have a Consumer Assistance Program that will help patients file an appeal or request a review of his or her health insurance plan’s denial/termination decision. The health insurance plan should provide patients with information about how they may file an appeal and the appeals process. The policy should be reviewed on this point during the patient’s enrollment process with the health plan. Many health insurance companies also provide details about the appeal process on their website.

What is important to remember is a patient should know their rights to fight a denial prior to receiving any medical services. Then a patient must remember that the health plan policy sets time limits for bringing an appeal so procrastinating is not advisable. Quick action is necessary and should be well documented by the patient in order to preserve future appeals or even legal action.

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