Q: What recourse does a patient have when a health insurer or managed-care provider rejects a claim?
A patient’s first step should be talking to the insurer. Most have a
toll-free number or help line people can use to ask questions or start
an internal review of their claim.
How the insurer handles this review can vary from state to state or by benefit plan.
In Indiana, for example, Anthem Blue Cross & Blue Shield customers
would file a formal grievance that is reviewed by the insurer’s staff.
The patient can be present or listen in on a conference call,
spokeswoman Jill Becher said. Depending on the issue or the benefit
plan, the patient can go through additional reviews if he or she
doesn’t like the outcome.
If a patient isn’t satisfied by the insurer’s reviews, he or she can ask an independent, outside panel of experts to look at the claim in most states. But these panels generally don’t consider claims until the patient goes through that initial review with the insurer.
"That’s sort of a gatekeeper," said Jerry Flanagan, health care policy director for California-based Consumer Watchdog. "They rarely change their mind, but you’ve got to do that first."
Insurance is largely state-regulated, so patients should check with state
officials to figure out whether an independent review is appropriate.
The regulators are usually in a state’s insurance or consumer affairs
department. A state’s website can point patients in the right direction.
An external review is usually done by a panel of doctors and nurses and includes someone who specializes in the field where the claim was rejected. They compare what the doctor and insurer did with common practice and try to determine whether the care denied by the insurance company was medically necessary.
If they find that it was, usually the insurance company must pay for the service according to terms of the member’s health plan.
If a patient’s state has no independent review, litigation may be an option.
The National Conference of State Legislatures lists several states that
have no independent, external review process: Alabama, Idaho,
Mississippi, Nebraska, Nevada, North Dakota and Wyoming.
Patients who have employer-sponsored insurance, which is subject to the federal Employee Retirement Income Security Act, generally have to sue in
federal court, where they normally can recover only the claim and some
court costs, said F. Bradford Johnson, an attorney who specializes in
People with individual policies might consider suing in state court over a contract violation. A patient can find attorneys who specialize in insurance bad-faith claims in the phone book or on the Internet.
"The basic concept is you had a contract for health care which said that you were going to get coverage when you needed it, and they broke that
contract," Flanagan said. "These attorneys specialize in forcing the insurance companies to live up to that promise to provide you health
Flanagan said insurance companies normally don’t quibble with low-dollar claims. He said rejections start to crop up with medical procedures that cost several thousand dollars or with treatments considered experimental, meaning they don’t have an established record.