Everyone who purchases insurance expects that their policy will provide financial security should an anticipated injury, illness, or loss occur. However, since insurance companies are for-profit organizations that seek to avoid paying out more claims than they receive premiums, they frequently refuse to pay claims arising from the losses of their clients.
Some insurance providers will find any excuse that justifies or explains their denial to pay your claim or delay payment as a tactic to force you into negotiating a settlement. One of the most frequently used explanation for a denied claim is that the treatment or procedure was not deemed medically necessary at the time it was provided. Sometimes this explanation is correct while other times your insurer is simply acting in bad faith.
If your insurance claim has been denied for any reason such as medical necessity, do not take the denial lying down without a proper explanation. If you believe that your insurance company has acted in bad faith by denying your claim, you should appeal the decision internally before hiring an insurance claim denial attorney to appeal the decision.
The attorneys at Stop Health Insurance Denial have the experience and resources to fight any insurance company in the U.S. irrespective of size and well-financed legal teams. Our lawyers handle cases from all over the country and have the capability to fight cases from any state since insurance laws differ from one state to another. In this article, we are going to discuss medically necessary treatment and the circumstances around which insurance companies may deny claims using this explanation. We are also going to look at some bad faith practices that exploit this clause and what to do to appeal the decision.
What is a Medically Necessary Treatment?
The term ‘medical necessity’ is essential in the insurance industry because it helps to determine what private insurance companies, Medicaid, and Medicare will pay for as per your policy. Most health plans do not cover treatments, procedures, or prescriptions that are not considered medically necessary depending on the plan’s terms as stated in its policy.
However, the definition of the term ‘medical necessity’ is often the source of ambiguity and confusion. In the long-term care and health insurance arena, an all-too-common explanation for claim denial is that your treatment was not medically necessary. This gives your insurer an excuse to deny your claim to avoid paying you.
Medical necessity has long been an amorphous concept for a number of reasons. Perhaps the most obvious one is that respective treatment plans tend to account for you as an individual just as much as your diagnosis. What this means is that a particular treatment may be considered necessary for only one of two patients who present with the same condition. It is this ambiguity that makes medical necessity such a compelling reason for denying insurance claims.
Some insurance companies try to specifically define medical necessity in their policies. However, these definitions differ from one plan to another. For instance, it has been defined as a supply or service that is:
- Ordered by a doctor
- Commonly and customarily recognized in the medical profession as the appropriate course of action in the treatment of the injury or sickness
- Neither experimental, educational in nature nor provided mainly for research purposes
- Not allocable to vocational training or scholastic education of the patient in the case of a hospital confinement
Conversely, some insurance companies use a general definition of medical necessity. For example, some policies consider care or treatment necessary when, in the insurer’s interpretation of what is deemed as acceptable medical standards in the state, it cannot be omitted without adverse effects on the patient’s condition.
Regardless of whether your insurance policy generally or specifically defines medically necessary treatment, the definition will typically be subject to varied interpretation. But how do you navigate such a grey area without the services of a competent lawyer well-versed in the state’s insurance law?
How to Protect Yourself in this Grey Area
The first thing to do to protect yourself from denial of coverage is to ensure that you have all the facts pertaining to what your insurer considers medically necessary treatment. Having this specific, or general, definition comes in handy when you later claim payment for medical services received. Information is power, and it can help you get ahead of a difficult claim denial situation in the future.
Another helpful thing to do is to always obtain pre-certification/ pre-approval of your prospective medical care or procedure, if possible, especially if you suspect its medical necessity. While such authorization or pre-approval does not guarantee coverage, it certainly goes a long way in smoothening the road ahead whenever possible. Medical necessity is one aspect that your pre-approval process can address beforehand if your carrier’s pre-certification staff does its job well.
If you do end up enlisting the services of an insurance claim denial attorney to unravel your insurer’s medically necessary treatment denial, there are a number of different ways for him or her to do so. For instance, he or she can enlist the services of a medical expert who will confirm that your treatment or care was medically necessary.
Your attorney could also obtain affidavits, sworn statements, and/or letters from your care provider or treating physician regarding the medical necessity of your care or treatment. This can go a long way in helping to strengthen your claim denial appeal or lawsuit.
As a third example, your attorney can exploit the time-tested contra proferentem doctrine, which states that whenever a contract’s language is ambiguous to the extent that it is subject to several reasonable interpretations, the language is interpreted against the contract’s drafter, which in this case is your insurance company. This doctrine works in your favor but to properly utilize it; you need a good lawyer.
Denial of Coverage
Although medical claims that use the medically necessary criteria are judged as per the specific case, there are some claims that are denied because of the absence of medical necessity. Sometimes, a conflict arises between what your doctor considers medically necessary treatment and what your insurance company’s coverage rules the state.
There are some situations where it is obvious that a procedure is not a medical necessity; such as a cosmetic procedure like a facelift. In such a case, your decision to undergo the procedure will not be covered by your insurance company but out of your pocket. There are other contentious areas that have been dismissed by the law, for example, the case of medicinal marijuana. The United States Supreme Court held that cannabis used for medicinal purposes has no medical necessity.
Whether or not your insurance provider successfully avoids paying your claim after a denial depends entirely on your actions, especially if you suspect they have acted in bad faith. If you immediately accept the denial without any intention to take further action, your insurance company will not pay your claim and will reap the benefits of mischaracterizing the medical necessity exclusion in your policy.
However, if you fight the decision to deny your claim and have all the evidence you need to have it overturned, your insurance provider will most likely agree to resolve the issue internally rather than have it solved by a third party during an external review. Note that, trivial issues such as material misstatement or clerical errors can be solved easily on your own. On the other hand, fighting a medical necessity denial requires the services of an attorney who understands the ins and outs of insurance law. The last thing you want after exhausting your appeals is to have your insurance company profit from your premiums while leaving you with unpaid medical bills.
Delay of Life Insurance Coverage
Life insurance law contains provisions that govern the action of insurance providers. Some statutes place restrictions on life insurance providers while others impose affirmative obligations on the carrier. One such affirmative obligation provision requires your insurance provider to complete any investigation of a claim within 30 days. The 30-day period begins when you notify your insurance provider of your claim.
The exception to this provision comes in when the insurance company is unable to reasonably complete its investigation on time. Despite this, the insurance company cannot decide to add more time to the 30-day period.
What to Do If Your Claim is Delayed or Denied
- Identify the Cause of the Delay (Denial)
Contrary to popular belief, most delayed claims are not caused by your insurer’s malicious intent to avoid payment; they are caused by either a coding mix-up, miscommunication, or administrative error. If months have lapsed before hearing back from your insurance company about your claim or receiving a check in your mail, investigate what could be the cause of the delay before jumping to conclusions.
While it is understandable why you may be frustrated by how long your insurance company takes to respond to your claim, a solutions-oriented mindset goes a long way in correcting the problem. First, call the hospital or clinic where you received treatment and talk to whoever is in charge of billing. If you are dealing with your health insurer directly, call them and inquire about the status of your claim.
If your claim was denied, contact your insurance provider immediately you receive your Summary of Benefits (SOB) to learn why. Always remain patient and courteous to the health insurance claims representatives. Since they deal with angry and impatient clients on a regular basis, being polite but assertive with the representatives may earn you points in their eyes making them extra helpful in return.
- Document Everything
Always document all your interactions with your insurance company concerning your delayed or denied claim including the following:
- Date and time of your phone call
- Names of the representatives you spoke to
- A description of everything that was discussed.
Documentation is king in the insurance world. If the representatives offer to make changes or adjustments to your bill, ask for confirmation in writing or via email. Your documentation may be helpful to your lawyer if you decide to hire one.
- Appeal Your Denied Claim
Always enquire first why your claim was denied before appealing the decision. If it was due to lack of prior authorization or insufficient medical necessity, your doctor might need to explain in writing why the treatment was necessary. If it was a clerical error or inaccurate/incomplete information, a correction is needed before resubmission.
If your medical claim has been denied because of a lack of medical necessity, it is within your rights to appeal this decision.
- Internal Appeal to Your Health Insurer: Your first step should be an internal appeal to your insurance company for a fair review of its decision to deny your claim. However, you and your insurance provider can agree to have the internal appeal process waived. Also, if you are already undergoing a treatment course or your doctor believes that an immediate appeal of your claim is warranted, you can request (through your lawyer) to have the appeal process expedited. An expedited appeal must be completed within two business days.
- External Appeal: If your claim is still denied, you can then move to an external appeal. Here, an independent third party will review your appeal before either granting your insurance company’s decision or overturning it. The third party conducting your review must be certified by the state and not affiliated with your insurance company. You must submit your external appeal application to the Department of Financial Services inside of 45 days from the date you received the denial at your first level of appeal or from the date you received a letter from your insurance provider waiving the internal appeal process.
How to Appeal a Denied Claim
Appeal processes vary depending on the insurance company and their policy. Some key aspects to remember include:
- Learn about Your Insurance Provider’s Appeal Process
Check your insurer’s website or call the customer care service line to learn more about appealing a denied insurance claim decision. This is because you will need detailed instruction on filing your appeal and completing the required forms. Since some carriers have a time limit for submitting your appeal, ask if your carrier has a set deadline for filing.
- Inform Your Clinic or Doctor to Hold Off the Billing Process
If you decide to appeal your claim denial, tell your doctor to hold off on billing you until you find out the status of your claim.
- Keep Track of the Paperwork
Have all pertinent documentation, letters, and billing statements in order throughout the appeal process. Also, keep records of everything such as your medical records, bills from your healthcare provider, copies of notifications from your insurance company, your explanation of benefits among others.
- Hire an Attorney
If you feel that your insurance company acted in bad faith by refusing to approve your claim, you may need to hire a claim denial attorney. The attorney will advise you on the best course of action to take to reverse the insurance company’s decision to deny your claim.
The Bottom Line
Often, when you find yourself in an insurance dispute, the opposing sides are seriously mismatched. This is because the insurance company has a well-financed legal team that handles insurance disputes and fights lawsuits brought against the company on a daily basis. To avoid paying large claims, settlements, or lawsuit awards, your insurer will eagerly dedicate its vast resources to limit the amount of money that it has to pay you for your legitimate claim.
Ergo, to get a fair fighting chance and a good deal, you need the services of an aggressive insurance denial and dispute lawyer. Stop Health Insurance Denial attorneys have the technical and legal experience (and resources) to go the distance to get your medical claim paid. You should hire one of our lawyers before negotiating anything with your insurance company or agreeing to accept the terms of a settlement. Your lawyer will explain to you the aspects of your case and the reason why the medical necessity clause was used in bad faith by your insurance company. He or she will also explain to you the merits of your claim and your rights under your state’s insurance act.
If you decide to file a lawsuit against your insurance provider, your attorney will be instrumental in preparing and filing the paperwork with the court. He or she will also collect all the necessary evidence and carry out all negotiations on your behalf. What’s more, your insurance company is more likely to take your appeal or lawsuit seriously if a competent attorney represents you.
How to Find a Good Insurance Denial Attorney Near Me
Stop Health Insurance Denial has seasoned attorneys capable of representing clients who have been wrongfully denied their insurance claims on the basis of the medical necessity treatment clause in your policy. If you believe your insurance provider acted in bad faith by denying your claim, contact us at 310-695-5241 to get a free consult and find out whether you have a strong case or not. We operate nationwide with our head offices located in Los Angeles, California.