You go to the doctor.

You show them your insurance card.

Everything seems normal.

Then a few weeks later, you open your Explanation of Benefits and see one terrifying word:

DENIED.

And immediately you think:

“Great. My insurance isn’t paying and now I owe thousands of dollars.”

Not necessarily.

A denied health insurance claim does not automatically mean you’re responsible for the entire bill, and it definitely doesn’t mean you should immediately pull out your credit card and pay whatever amount you see.

Sometimes a claim really isn’t covered.

But other times?

The problem may be missing information, incorrect billing, authorization requirements, coding issues, network rules, or another issue that can potentially be corrected.

Here’s how to figure out what’s actually happening.

First: A Claim Denial and a Medical Bill Aren’t the Same Thing

This is important.

An Explanation of Benefits, commonly called an EOB, is a statement from your insurance company explaining how a claim was processed.

It typically shows things like:

What the provider charged
What the insurance company allowed
What the insurance company paid
What wasn’t covered
What may be your responsibility

An EOB is generally not itself a bill.

So when you receive one, don’t immediately assume the biggest number on the page is what you owe.

Read it.

Then look for the part explaining why the claim wasn’t paid.

Step 1: Find the Actual Reason for the Denial

Insurance companies don’t just get to write:

“Nope.”

and call it a day.

For health plans subject to applicable federal appeal protections, consumers have rights to information about why a claim or coverage decision was denied and information about how to challenge that decision.

Your EOB or denial notice may contain a denial or remark code explaining what happened.

Common situations can include:

The provider submitted incorrect information.

Additional medical records are needed.

Prior authorization was required.

The insurance company believes the service wasn’t medically necessary under the plan’s criteria.

The provider was out of network.

The service isn’t covered by the policy.

The claim was submitted incorrectly.

The insurer needs additional information before processing it.

Those are very different problems.

And they require very different solutions.

Step 2: Check Your Plan Documents

This is where we separate:

“Insurance denied my claim.”

from:

“My policy doesn’t cover this.”

Those aren’t always the same thing.

Pull up your plan documents and look at the benefit involved.

Was the service covered?

Was it subject to the deductible?

Did it require prior authorization?

Did you need to use an in-network provider?

Were there limitations or exclusions?

Your insurance contract ultimately matters much more than what somebody remembers being told on the phone.

Step 3: Make Sure the Claim Was Submitted Correctly

Sometimes the problem isn’t your coverage at all.

It’s the claim.

Maybe information is missing.

Maybe something was submitted incorrectly.

Maybe the insurer needs documentation from the provider.

This is why your next call may need to be to the provider’s billing department rather than immediately assuming your insurance is useless.

Give them the denial information and ask whether they need to correct or resubmit anything.

Step 4: Call the Insurance Company

If the denial still doesn’t make sense, call the member-services number on your insurance card.

Have these ready:

Your member ID
Claim number
Date of service
Provider’s name
EOB or denial notice

Then ask a very specific question:

“Can you explain exactly why this claim was denied and what needs to happen for it to be reconsidered?”

Write down:

Who you spoke with
The date and time
The reference number for the call
Exactly what they told you

Health insurance problems become much easier to handle when you have a paper trail.

Step 5: If Something Is Wrong, Fix It

If the insurer says the provider needs to submit additional information, contact the provider.

If something was coded incorrectly, the provider may need to correct it.

If records are missing, they may need to send them.

If the insurance company made an error, ask what process is required to have the claim reprocessed.

A denial isn’t always the end of the claim.

Sometimes it’s simply the beginning of figuring out what went wrong.

Step 6: Know When to Appeal

Here’s the part many consumers don’t realize:

You may have the right to challenge the insurance company’s decision.

CMS explains that when an applicable health plan denies payment for a treatment or service, consumers can request an internal appeal asking the plan to reconsider its decision. Depending on the plan and type of denial, an external review by an independent organization may also be available after the internal process.

That doesn’t mean every denied claim will ultimately be paid.

But it does mean:

DENIED doesn’t necessarily mean discussion over.

Your denial notice or plan documents should explain the appeal process and applicable deadlines.

Follow those instructions carefully.

Don’t Wait Six Months to Deal With It

This is where people get themselves into trouble.

They receive an EOB they don’t understand.

They put it on the counter.

Then another letter comes.

Then a bill comes.

Then another bill comes.

Eventually they’re dealing with collections while everyone involved is trying to figure out something that may have been easier to address months earlier.

When something doesn’t look right:

Deal with it early.

And Please Don’t Assume Your Broker Controls Claims

Your broker can be a valuable resource.

We can help you understand your coverage, point you toward the right department, help you identify what information you may need and sometimes assist with communication.

But your broker isn’t sitting inside the insurance company’s claims department approving and denying claims.

We’re your broker, not the insurance company.

There are decisions only the carrier, plan administrator, provider or applicable reviewer can make.

Knowing who actually controls each part of the process saves everybody a lot of frustration.

Before You Pay a Huge Medical Bill, Understand It

This may be the biggest takeaway from this entire article.

If you receive a large medical bill after using your insurance:

Don’t ignore it.

But don’t blindly pay it either.

Compare the bill with your EOB.

Check the allowed amount.

Look at what insurance paid.

Look at what the EOB says is your responsibility.

Make sure the provider’s bill matches.

And if something doesn’t make sense?

Ask questions.

You have every right to understand what you’re being charged for.

The 77-Call-Pete Bottom Line

Seeing CLAIM DENIED is scary.

But it isn’t always the final answer.

First determine why it was denied.

Then determine whether the claim was processed correctly.

Check your coverage.

Correct missing or inaccurate information when appropriate.

And if you believe the plan made the wrong decision, understand your appeal rights and follow the process described by your plan.

Most importantly:

Don’t panic. Investigate.

Health insurance becomes a lot less intimidating when you understand what the paperwork actually means.

That’s exactly why we created the 77-Call-Pete Health Insurance Knowledge Center.

No insurance alphabet soup.

No pretending insurance is simple when it isn’t.

Just straight answers about how your coverage actually works.

For Health Insurance That Can’t Be Beat, Dial 77-Call-Pete.

This article provides general educational information and isn’t a guarantee that a denied claim will be covered or overturned. Claims, appeals, deadlines and review rights depend on the type of health plan, applicable law and the specific plan documents.