New Rules for Appeals of Health Insurance

NEW RULES FOR APPEALS OF HEALTH INSURANCE CLAIM DENIALS 11/22/10

Your health insurance claim is denied, and you disagree. So you appeal. But the appeal seems more like a kangaroo court, since the insurance company itself decides your appeal. If that doesn't seem fair to you, you are not alone. It didn't seem fair to congress either, and they have now changed the rules.

Insurance companies make a variety of decisions that affect consumers. For example, your claim for medical care, or a hospital visit, may be denied. Or your health insurance coverage might be cancelled. Typically, the insurance company provides a procedure to appeal its decisions. And in most cases, the appeal is to the insurance company itself.

The new health care reform law provides for new regulations that expand consumer appeal rights. Maybe most important is the right to have your appeal heard by an independent and external review board. While we are still waiting to learn all the details of how this will work, your appeal now can be heard and decided by people who are not employed by the insurance company itself.

If you work for a company that offers its own health plan and does not contract with an insurance provider, the new right to an independent external appeal process applies to this situation too. Everyone who gets a new insurance plan is covered. The old rules still apply until your plan changes.

It makes a big difference to have an external review process. No matter how much the insurance company tries to be fair, it has a financial incentive to deny consumer appeals. According to the Kaiser Family Foundation, when external review boards have been used previously, 45% of appealed denials have been reversed.

Insurance company denials of health care claims can be costly, and downright aggravating. And it has been especially frustrating to have an appeal process that doesn't seem fair. Now, under the new health care law, appeals should give you a good chance for a fair hearing.

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