Patients count on health insurance to be there for them financially when they face major medical expenses. When a claim for a service or procedure is denied, that leaves patients saddled with unexpected medical bills and frustrated with their health insurance.  

An estimated 10 to 15% of Americans have experienced a health insurance claim denial and 42% say the rate of denials are increasing year to year, according to a survey by Experian. According to a KFF survey, denial rates vary by insurer, going up to 20% for insurance purchases in the private market and 21% for employer-sponsored plans.  

Claims denials can contribute to medical debt. According to The Commonweath Fund, an estimated one third of adults who are of working age have medical debt.  

Denials also have an impact on healthcare. According to a 2023 KFF report, 26% of adults who had a claim denied “experienced … significant delays in receiving medical care or treatment” and 24% ended up not receiving the treatment ever. Sadly, 24% said their health declined as a result of delays or lack of access to care.  

The good news is that health insurance claims denials can be avoided. Knowing what the common mistakes are and how to correct them in time will go a long way towards making the claims process smoother for doctors and their patients.  

1. Failure to receive prior authorization. While it has become increasingly cumbersome for providers and patients, prior authorization is an important process for ensuring that a service or a particular provider is covered by your insurer. The best way to know whether your insurer will pay for a new procedure or service is to actually ask them beforehand.  

2. Service is out of network. A claim can be denied if a clinic or provider is not in the insurer’s network. Again, the best way to avoid this scenario is to check beforehand. Some insurance companies have an online portal where you can see if a doctor is listed in the network. You may also be able to call your insurer and ask for a list of in-network providers. In some cases, you can also use the prior authorization process to confirm an insurer will cover an out-of-network provider.   

3. The wrong billing code was used. Billing code errors are one of the most common – and also one of the most easily avoidable – mistakes in filing claims. Errors include using the wrong code for a procedure, missing billing code modifiers, outdated billing codes, filing late, inaccuracies in patient information, missing or inaccurate claims data, formulary changes, incorrectly bundling services, and providing the wrong location for where care was delivered. Healthcare providers can reduce the likelihood of claims by hiring more staff or outsourcing claims submissions to a third-party service. Patients can also be more proactive, such as by ensuring they have provided accurate personal information to their provider.  

4. The insurer questions the medical necessity of a procedure. If an insurer questions the medical necessity of a procedure that means that they may not have seen sufficient documentation of a patient’s health condition and how the proposed treatment will address it. Additional documentation that may be needed include a patient’s medical history, physician consultation reports, discharge summaries, radiology reports, or operative reports. A provider can also confirm in advance that a valid supporting diagnosis has been made for the procedure they are recommending.  

5. The procedure is not covered by your plan. If an insurer doesn’t cover a specific procedure, that’s obvious grounds for a claims denial. Again, in this situation, the best strategy is to find out before getting the procedure. Besides checking your insurance plan itself, you should look up how essential health benefits are defined under your state’s laws. Fertility treatments, acupuncture, or chiropractic services are examples of services that might be covered in some states but not others. It also helps to know if your plans is subject to Affordable Care Act rules on benefits. Plans that aren’t may not cover basic medical expenses such as prescription drugs and mental health care.   

6. The insurer is concerned over the cost of the procedure. An insurer may also deny a claim due to concerns over costs. You can avoid this by opting for less expensive treatments first. If you can demonstrate that you tried the lower-cost options, your insurer may be more open to paying for higher-cost treatments.  

Understanding Personal Injury Claim Denials and the Importance of a Second Opinion 

Personal Injury claims denials are often a frustrating experience, leaving victims uncertain about their next steps. Common reasons for denial include: 

• Failure to seek medical attention
• Gaps in treatment 
• Lack of verifiable medical records 
• Presence of pre-existing conditions 
• Missed deadlines

Insurers may argue that symptoms should have manifested sooner or that a pre-existing condition is to blame, potentially leaving legitimate claims unaddressed. In these situations, speaking with a personal injury attorney is critical. Attorneys can assess whether the denial was justified and, in some cases, pursue a bad faith claim against the insurer. This approach can be essential to protecting a victim’s rights, as insurers have a duty to act in good faith. 

A claims denial is not necessarily the end of the story when it comes to getting your care paid for. But it can gum up the works, delaying treatment, or add another bill you have to worry about. One of the best ways to deal with claims denials is to avoid them in the first place. 

How Gain can assist in Navigating Claim Denials 

In the face of claim denials, Gain serves as a crucial support system, particularly for those involved in personal injury cases. Gain provides a robust platform that connects healthcare providers and attorneys, ensuring that patients receive the medical care they need without the immediate financial burden.  

By facilitating seamless coordination between law firms and healthcare providers, Gain helps ensure that medical treatments are initiated promptly and efficiently and all the case’s notes and records are easily available, even when insurance claims are denied or delayed. This approach not only alleviates the financial stress on patients but also empowers healthcare providers and attorneys to focus on optimizing care and settlement outcomes. Contact us now to request a consultation and learn how we can help you gain.