Reasons for Health Insurance Claim Denial
Having an injury or illness that requires professional medical treatment is distressing enough. If you submit a claim with your health insurance company for coverage that gets denied, you can face even more stress and financial hardship. You may be able to file an appeal to get the insurance company to reverse its decision. An insurance claim lawyer in Phoenix can help you with the appeals process, as well as a bad-faith insurance claim if the company denied benefits unlawfully.
Valid Reasons for Claim Denial
There are hundreds of reasons why a health insurance company may deny a claim. The insurance company might cite an exception or provision in the policy that blocks coverage, for example, or it might have a reason related to mistakes made by the policyholder, such as paperwork errors, on the claim.
Common reasons for a health insurance company to deny a client’s claim include:
- Missing information on the claims paperwork
- The assertion that the requested care was not medically necessary
- A request to try a different (usually cheaper) type of medical care first
- The requested medical service is not a covered benefit
- The doctor or facility is not part of your plan’s provider network
- You did not obtain the required pre-authorization
- You broke one of the health insurance company’s rules
- You missed the deadline to file
These are all valid reasons, as long as they are in keeping with the language of your health insurance policy. If you believe the insurance company is mistaken in its denial of your claim, you can file an appeal to have the carrier reconsider. If you believe that the denial occurred due to insurance bad faith, or an intentional failure to properly handle your claim, you may also have the right to bring a bad-faith lawsuit against the insurer for your losses.
When it Might Be Bad Faith
Insurance bad faith refers to an insurance carrier failing to fulfill its legal obligation to handle claims in a good-faith attempt to resolve them. All insurance companies in Arizona have a responsibility to properly handle and evaluate claims in accordance with state and federal laws. The failure to do so, either carelessly or intentionally, is insurance bad faith.
The following are examples of bad-faith reasons for a health insurance company to deny a claim:
- Knowingly misrepresenting a policy or its terms while selling the policy
- Intentionally misinterpreting the language of a policy
- Failing to promptly and properly investigate the claim
- Failing to communicate with the client
- Having no legitimate reason to deny the claim at all
- Giving no reason in the denial letter
Other examples of insurance bad faith are devaluing a claim, refusing to offer a fair and reasonable settlement, and unfairly delaying the investigation or payout. If you are the victim of a wrongful claim denial in Arizona, you may have grounds to file a bad-faith lawsuit against the insurance company to hold it accountable. A successful bad-faith insurance lawsuit could result in financial compensation for your related losses and inconvenience.
What to Do if Your Claim Is Denied
If a health insurance company denies your claim, carefully read the language of the policy and compare it to the reason given in the denial letter to check if the reason is valid. If you believe the insurance company made a mistake, file an appeal. The appeals process should be outlined in the letter you received with your claim denial.
Follow the provided steps of the appeals process exactly for a valid legal action. Once the insurance company receives your appeal, it may overturn its original decision and offer benefits to cover your medical expenses. If not, contact an insurance bad faith attorney in Arizona for assistance. An attorney can help you with an appeal and/or a bad-faith insurance lawsuit, if applicable.