Health Plan Disputes: An Overview

Disputes between consumers and their health insurance companies are becoming more and more common. Disagreements can crop up over things like denial of coverage for medical services already received, a refusal to authorize a procedure or visit to a specialist, or an incorrect charge for office visits or services.

Because these days it seems that coverage disputes go hand-in-hand with having medical insurance, it’s important to know how to proceed when you disagree with a charge or decision from your health plan provider. This article outlines each step to take. (If you are struggling to pay lots of medical bills, a related problem, see Seeking Financial Assistance For Your Medical Bills.)

First Steps: Know Your Plan and Your Rights

Before you call customer service or ask for an internal review, make sure you know what your health plan does and does not cover—and what procedures you must follow in order to get coverage in the first place. Carefully read the Summary Plan Description as well as the plan’s Evidence of Coverage (this is the detailed description of the plan). You can get the Evidence of Coverage from your employer. If you are self-insured, get a copy from your insurance company.

Once you’ve armed yourself with the appropriate information, you can:

• decide whether your complaint is worth pursuing (for example, if your health plan requires you to get a referral before seeing a specialist, and you failed to do so, your attempt to get coverage for the specialist’s visit will most likely be a waste of time), or
• point to the relevant part of the contract when arguing that the health plan erred in denying coverage.

Keep in mind that you can avoid some health plan disputes by learning about the details of your health plan before you use it.

A Note About Copayments and Deductibles

A key to understanding your health plan—and avoiding surprises when the bill comes—is knowing what your payment obligations are, including:

• Copayments. These are often between $10 and $50 per office visit. Copayments for hospital visits, surgery, and other procedures are often higher.
• Deductibles. Some PPOs require participants to pay the full cost of medical services until they reach a certain dollar figure (say, $500). This is called the deductible. Once you have spent the amount of the deductible in any given calendar year, the health plan coverage kicks in.

It’s wise to keep track of your deductible status, especially if your deductible is high. If you meet the deductible amount in a given calendar year, think about getting other costly procedures or treatments done within the same year rather than waiting until the next year when you have to meet your deductible all over again.

Informal Methods: Calling Customer Service

If you disagree with a health plan charge or coverage decision, you should start by calling customer service. Customer service agents may be able to reverse an erroneous charge or approve services that were originally denied. If the agent can’t help, ask to speak with a supervisor. Sometimes the agent will ask you to submit more documentation (like a letter from your doctor) or resubmit documents the plan claims not to have received.

Obtain a Notice of Denial

If your complaint involves a denial of coverage or refusal to authorize services, ask the health plan for a letter that gives you notice of the decision and an explanation of the health plan’s position.

Ask for an Internal Review

If you cannot resolve the problem by contacting customer service, it’s time to use the health plan’s internal review process (also called an appeal) and make a formal request that your health plan change its decision about services or payment. All health insurance companies and plans must establish rules and procedures to handle appeals (your plan may also call it a “consumer complaint” or “grievance”).

Your Evidence of Coverage will outline how to initiate the internal review process and time limits for doing so. Sometimes the process begins with a call to a complaint or grievance hotline. Often, you must follow up by submitting a completed form. Attach all documentation supporting your position.

Your health plan must respond to your appeal within the time period outlined in the Evidence of Coverage. If the health plan’s decision is less than satisfactory to you (this is called an “adverse determination” or “adverse decision”), you may be able to seek review from an organization outside of your health plan.

Arbitration

Some health plans contain a voluntary or mandatory arbitration clause. In arbitration, you submit your dispute to a neutral third party who considers each side’s position and then makes a decision. If the arbitration is mandatory (meaning you are required to submit the dispute to arbitration as part of the review process), it cannot be binding—which means you are not required to accept the arbitrator’s decision. If the arbitration is voluntary (meaning you can choose whether or not to submit the dispute to arbitration), it may be binding (that is, the arbitrator’s decision is the final word in the dispute).