Appealing Denied Health Insurance Claims

Few things are more frustrating than paying your premiums faithfully, only to have your health insurer deny a claim when you need coverage the most. Whether it’s for a diagnostic test, surgery, hospital stay, or ongoing treatment, a denial can cause financial strain and delay necessary care, with serious repercussions on your health. Fortunately, patients have the right to appeal denied claims, and many denials can be overturned with persistence and the right approach.

This article explains how to navigate the appeals process, what steps to take before involving a lawyer, and when a denial may cross the line into insurance bad faith. If you believe your insurance company is improperly denying your claim in violation of its legal duty to act toward you in good faith, contact Gianelli & Morris in Los Angeles to speak with an experienced California insurance bad faith lawyer.

Read the Denial Letter Carefully

Every appeal begins with understanding why your claim was denied. By law in California, insurance companies must provide a denial letter that explains the basis for their decision. The letter will usually cite specific policy language or give a short explanation, such as:

• The treatment is “not medically necessary.”
• The procedure is considered “experimental” or “investigational.”
• The provider is “out of network.”
• There was an error in billing or coding.

Reading carefully is critical. Sometimes, the issue is clerical rather than substantive. For example, a claim may be denied because of a missing billing code or incomplete medical documentation. In those cases, your provider’s billing department may be able to fix the problem quickly.

Correcting Errors and Simple Fixes

One of the most common and most easily resolved reasons for a denial is administrative error. A misplaced digit in a billing code, a mismatch between the treatment code and diagnosis code, or a clerical mistake in the medical records can trigger an automatic rejection.

If the denial letter points to one of these issues, the first step is to contact your doctor’s office or hospital billing department. Providers can often resubmit the claim with the correct coding or supporting documentation.

Another simple resolution occurs when the insurer claims it lacks the relevant medical records. In such cases, the provider might not have submitted the complete chart or relevant documentation. Supplying the missing information may be enough to secure approval.

Peer-to-Peer Reviews

If the denial is based on medical necessity, one powerful tool is the peer-to-peer review. This is a process where your treating physician speaks directly with the insurance company’s medical director (or another physician reviewer) to explain why the treatment is necessary.

Peer-to-peer reviews can be effective because they move the conversation out of the hands of claims adjusters and into a medical discussion. Unfortunately, insurers sometimes make it difficult to schedule these calls or use non-specialist reviewers unfamiliar with the condition being treated. Still, when used properly, peer-to-peer review can result in an overturned denial without the need for a lengthy appeal.

The Formal Appeal Process

If the initial steps do not resolve the issue, patients can file a formal appeal. Each insurer has its own appeal procedures, which are outlined in your policy and usually restated in the denial letter. Generally, there are two levels of appeal:

1. Internal Appeal – You submit documentation to the insurer asking them to reconsider their decision. This often requires providing medical records, letters from your doctor, and any additional evidence supporting medical necessity.

2. External Review – If the internal appeal fails, federal and state law often entitles you to an external review by an independent medical expert or review board. This gives you an opportunity to have your claim evaluated outside the insurance company’s influence.

Strict deadlines apply, and missing a deadline can forfeit your right to challenge the denial. That’s why it’s important to begin the process immediately after receiving the denial letter. Also, the evidence presented in an initial appeal can affect later appeals, so getting legal advice early on is crucial.

Common Bad Faith Denial Tactics

Not every denial is simply a matter of coding errors or reasonable medical disagreement. Sometimes, insurers act in bad faith by denying valid claims in ways that contradict policy language, common sense, or medical standards.

Examples of bad faith denials include:

• Labeling treatment as investigational or experimental when it is widely accepted in the medical community. For example, some insurers continue to deny coverage for advanced cancer treatments or new surgical techniques even after they’ve become standard practice.
• Declaring a procedure not medically necessary despite overwhelming evidence to the contrary, sometimes even when multiple specialists agree it is essential. Insurers sometimes make blanket denials based on policy language without independently reviewing the patient’s request, a practice that does not comport with the requirements of California law.
• Unreasonable delays in processing appeals, such as repeatedly requesting the same documents, losing submitted paperwork, or dragging out the review in hopes the patient will give up.
• Cherry-picking outdated or irrelevant medical studies to justify denials, even when the bulk of current research supports the treatment.
• Inconsistent application of policy language, where one patient receives approval while another is denied for the same treatment under the same plan.

When insurers engage in these tactics, they may be violating their duty of good faith and fair dealing. At this stage, it may be time to consult an attorney.

Proving Medical Necessity

The most common justification for a denial is that the requested treatment is not “medically necessary.” While the phrase sounds objective, insurers often interpret it narrowly, using internal guidelines that may not reflect current medical practice.

Patients can strengthen their appeal by providing:

• Detailed letters from treating physicians explaining why the treatment is necessary, what alternatives were tried, and the likely consequences if care is delayed.
• Supporting medical literature, such as journal articles and practice guidelines from respected medical organizations.
• Evidence of FDA approval and widespread medical acceptance of the treatment.
• Personal medical history, showing how prior treatments failed and why the proposed care is essential.

The more comprehensive and specific the documentation, the harder it is for an insurer to maintain a denial without appearing unreasonable. Depending on where you are in the appeals process, it might be wise to consult an attorney about how to proceed to protect your rights and put yourself in the best position for a successful resolution.

Why Persistence Matters

Insurance companies count on the fact that many patients will not pursue appeals, especially if the process seems overwhelming. Yet statistics show that patients who appeal denials are often successful. According to some reports, more than half of internal appeals result in claim approvals, and external reviews frequently favor the patient.

Persistence is key. Even if the first appeal is denied, the process may ultimately succeed. Moreover, a well-documented appeal creates a record that can be invaluable if legal action becomes necessary later.

When to Call a Lawyer

If you’ve exhausted the appeals process or if the insurer’s behavior clearly suggests bad faith, it may be time to seek legal help. Insurance bad faith lawyers can review your case, determine whether the denial violates the law, and pursue litigation if necessary.

Legal action may be appropriate if:

• The insurer denies coverage despite clear policy language requiring payment.
• The denial contradicts established medical standards.
• The insurer engages in stalling, harassment, or deliberate obstruction.
• The denial results in significant harm due to delayed or withheld treatment.

An attorney can not only fight to recover the cost of the denied treatment but may also pursue additional damages if the insurer acted in bad faith.

Contact Gianelli & Morris

Appealing a denied health insurance claim can feel daunting, but patients are not powerless. By carefully reading the denial letter, correcting simple errors, working with doctors on peer-to-peer reviews, and pursuing formal appeals, many denials can be overturned.

Unfortunately, insurers sometimes engage in tactics that go beyond honest mistakes, using bad faith practices to avoid paying valid claims. When that happens, persistence alone may not be enough. In those cases, consulting with an experienced insurance bad faith lawyer may be the best way to ensure your rights are protected and that you receive the coverage you deserve. In California, contact Gianelli & Morris in Los Angeles for a free consultation.

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