Denied a health claim? Now what?

There are two methods of appeal: internal and external. The internal appeal is to the insurer itself. An external appeal is to your state department of insurance or another governing body.

Internal and external appeals

The internal appeal is the first step of the appeal process. Here you request more information and ask the insurer to reconsider its decision. External appeals are filed when internal appeals have been exhausted and the insurer won't reconsider your case.

Many states have implemented laws governing external appeals that in certain cases give you the right to a review by an independent board of experts. If the appeal is determined in your favor, your insurance company cannot deny your claim.

Sometimes these reviews are called grievances and sometimes appeals, depending on the state and the type of issue involved. Most states with such laws give a patient the right to obtain a review of the original decision only by people associated with the health plan, although an increasing number of states have also enacted laws that guarantee a patient's right to appeal certain decisions to independent review organizations or government agencies that are not affiliated with the patient's health plan.

In addition, not all health plans are subject to the laws of the states in which they operate. If your plan is self-insured -- meaning the employer pays 100% of the claims -- it is not subject to state laws. If your plan isn't self-insured, contact the department of insurance in your state to determine what laws apply.

When you are appealing your denial, it is important that you find the correct person to send your appeal letter to. If you're not sure, call your health plan administrator and ask for the name and address of the appropriate person. Send all letters by certified mail so you have a record of having sent the letter and a receipt that it was received.

What affects your appeals process?

The National Committee for Quality Assurance requires that physicians review any denial and that health plans provide the right to independent external appeals for those insurers seeking committee accreditation.

Additionally, there are state and federal mandates you should be aware of:

Federal mandates

For federal insurance programs, all executive agencies are required to implement grievance and appeal procedures recommended by the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry.

Managed care plans that contract with Medicare must follow grievance and appeal procedures as part of their Medicare contracts.

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State regulations

In many states, a health care professional with appropriate expertise is required to participate in the appeals process. Some states limit the authority of anyone but a licensed physician to deny claims.

Laws in some states specify a role for physicians, recognizing they may appeal a claim on behalf of a patient.

Many states protect a physician's right to advocate for medically appropriate care by prohibiting plans from punishing doctors who do so.

Some states sponsor patient-assistant groups to help consumers with their appeals.

Updated Nov. 4, 2009

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