THE CLAIM GAME

By Caroline E. Mayer

It happens 500,000 times a day; an insurance company denies a health claim.  Here’s how to fight back when your insurer says no.

George Craft had Parkinson’s disease.  A retired machinist from Dunlop, Tennessee, Craft, 71, thought purchasing Medicare drug coverage would lower all his prescription costs.  So he couldn’t understand why the insurer refused to pay for Mirapex, the only drug that has helped keep his Parkinson’s symptoms in check.

Craft suspects the cost--$260 a month—prompted the rejection.  The insurer offered to pay for two alternative medicines, including a generic drug that costs only $7 a month.  Unfortunately, “they didn’t do the job,” says Craft, who paid the $260 himself.

Since he bought the drug from a private insurer, Craft had to begin his appeal there.  With help from the nonprofit Medicare Rights Center (800-333-4114  www.medicarerights.org ), he challenged the claim denial.  It took a lot of paperwork, plus help from Craft’s doctor, to convince the insurer that using Mirapex was essential, but six months later they succeeded.  “It was good news,” says Craft, who lives with his wife on about $2500 a month.  “We would have been kind of short if we’d had to pay.”

For Craft, tussling with his insurer was a serious budget issue.  For Arizona resident Theresa Rattei, 51, it became a life and death struggle.  Rattei, 51, was diagnosed with cancer in 2006 and had chemotherapy twice, with little success.  In January 2008, her doctor prescribed a radiation treatment, but the insurer managing Rattei’s health plan deemed it experimental—and thus not covered.

The problem: Her cancer was in a bile duct just outside the liver.  Had it been in the liver, the treatment would have been approved.  The difference is “a matter of millimeters”, says Rattei.

Margie Griffen of the Patient Advocate Foundation (800-532-5274   www.patientadvocate.org ), helped Rattei appeal to her husband’s employer—employers being the real payers of claims under what are called self-funded plans.  It took eight months of battling to win approval of the treatment as a medical necessity, and the radiation did halt the cancer’s advance for awhile.  Though now, Rattei reports, “two spots have grown in my lungs.”

The debate over health care reform may revolve around the uninsured, yet even for Americans with insurance, coverage often falls short.  Medical debt caused a staggering 62 percent of personal bankruptcy filings in 2007—and three quarters of these filers actually had health coverage.  Yet the most frequent outrage in health insurance may be the rejected claim.  The Department of Labor estimates that about one claim in seven made under the employer health plans that it oversees is initially denied—about 200 million claims out of the 1.4 billion submitted yearly.  The reason can range from a simple paperwork error, such as an incorrect diagnosis code, to the more contentious finding that a procedure is not medically necessary.  For Medicare patients, the rate of denials is similar.

“We think some companies are probably counting on the hassle factor, so that people pay out of their own pockets,” says Kansas Insurance Commissioner Sandy Praeger.

Patient advocates say insurance companies have become increasingly aggressive in denying claims, especially for expensive treatments for diseases such as Parkinson’s and cancer.  “We’re seeing more high dollar value claims rejected than before,” says Kevin Lembo, whoa s Connecticut’s health care advocate helps families deal with insurers.  Lembo’s advice:  “Don’t accept the insurance company’s word as final.  It is not, nor should it be.”

Connecticut is among 46 states with procedures for the independent review of denials—and about half of those appeals are successful.  Yet patients appeal too few denials, says Lembo:  “Ninety six percent walk away.”

A factual record is the key to success.  “If you just say, ‘I really need this,’ you’re not giving the company anything it didn’t have the first time they reviewed your claim,” says Jeniffer C. Jaff, who directs Advocacy for Patients with Chronic Illnesses (800-674-1370   www.advocacyforpatients.org ).  So build your case.  Jaff says that she wins 80 percent of appeals, a percentage that leads her to one conclusion: “Insurance companies are denying claims way too often.”

When your claim is denied:

1. Don’t pay the bill
2. Get a reason for the denial in writing
3. Review and follow your plan’s rules

Make the easy fixes…

1. Missing information?  Fill it in.
2. Coding mistake?  Have your doctor fix it.

Assess other reasons for the denial

1. Preexisting condition
2. Lifetime benefit cap
3. Change of employer, so coverage was delayed
4. No network facility or physician was available
5. Drug wasn’t on your plan’s formulary list for the illness
6. Treatment was deemed unnecessary or unproven

When preparing an appeal…

1. Check the back of your denial notice to see how long you have to file.  It may be 180 days—or 60 for a private Medicare plan.
2. Gather objective evidence of medical necessity, such as test results and prior failed treatments.
3. Collect journal articles showing the treatment is safe & effective.
4. File the request in writing—certified mail, return receipt

If you want help, seek out…

1. A nonprofit patient advocate (your state’ s insurance regulator or a disease association can suggest names)
2. Medicare’s help line (800-MEDICARE)
3. A lawyer if there’s a large sum of money at stake.

If your insurer stands firm, you can seek further review.

1. Under a fully insured plan (private insurer pays claims)—go to your state insurance regulator.
2. Under a self-funded plan (employer pays claims)—you will likely need to go to court, though your state insurance regulator can sometimes jawbone on your behalf.
3. Under Medicare, there are three more stages of appeal—an independent panel, an administrative law judge, and the Medicare Appeals Council.