What is a denial of claim? | healthinsurance.org (2024)

FAQs

What is a denial of claim? | healthinsurance.org? ›

Denial of claim is the refusal of an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.

A health insurance denial happens when your health insurance company refuses to pay for something. If this happens after you've had the medical service and a claim has been submitted, it's called a claim denial.

Denial of medical care or refusal of medical care may refer to: Failure to provide medical treatment: the refusal to provide healthcare to a patient who requires it. Refusal of medical assistance: a patient's voluntary refusal to receive medical care.

The claim has missing or incorrect information.

Whether by accident or intentionally, medical billing and coding errors are common reasons that claims are rejected or denied. Information may be incorrect, incomplete or missing. You will need to check your billing statement and EOB very carefully.

A denial is when your insurance company refuses to pay or denies responsibility to pay for medical services or treatment that has been provided to you or a family member.

Data were reported by insurers for the 2021 plan year and posted in a public use file in October 2022. We find that, across HealthCare.gov insurers with complete data, nearly 17% of in-network claims were denied in 2021. Insurer denial rates varied widely around this average, ranging from 2% to 49%.

Examples of Denial

Some examples: Someone denies that they have an alcohol or substance use disorder because they can still function and go to work each day. After the unexpected death of a loved one, a person might refuse to accept the reality of the death and deny that anything has happened.

Introduction: Illness denial pertains to medical patients who do not acknowledge the presence or severity of their disease or the need of treatment.

Denial codes are alphanumeric codes assigned by insurance companies to communicate the reasons for rejecting or denying a health care claim submitted by a medical provider.

Which health insurance company denies the most claims? ›

UnitedHealthcare is the worst insurance company for paying claims with about one-third of claims denied. Kaiser Permanente is the best large health insurance company for paying claims, denying only 7% of medical bills.

Under the Affordable Care Act, health insurance companies can't refuse to cover you or charge you more just because you have a “pre-existing condition” — that is, a health problem you had before the date that new health coverage starts. They also can't charge women more than men.

Minor data errors are the most common culprit for claim denials. Sometimes, a provider may code the submission wrong, leave information out, misspell your name or have your birth date wrong. Your explanation of benefits (EOB) will give you clues, so check it first.

Dirty Claim: The term dirty claim refers to the “claim submitted with errors or one that requires manual processing to resolve problems or is rejected for payment”.

The appeal process gives you two options for appealing a denial: an internal appeal and an external appeal. An internal appeal is an effort to get the insurance plan to change their mind and approve your request, this may require that you provide additional information.

If you then get a denial for that service, you can bill the patient for the charge. If you don't have an ABN on file, however, you won't be able to charge the patient for the non-covered amount, unless it's something Medicare specifically excludes from coverage (like cosmetic surgery).

Insurance companies deny claims for many reasons, such as insufficient evidence, missed deadlines, or policy exclusions. If your insurance company denied your claim, you can file an appeal, agree to mediation or arbitration, or take the insurance company to court for bad faith.