What is a Denial?

Everybody who has dealt with an insurance carrier has dealt with a denied claim--whether that's medical insurance, homeowners insurance, renter's insurance, or auto insurance. What that means is sooner or later, you will also receive a denial for payment from an insurance carrier. But why does that happen when you pay your premiums, deductibles, and copays? Why does it seem like you are financially obligated to pay your bills, but the insurance carrier can just pick and choose what they pay? 

In some cases, they can pick and choose what they pay because that is the contract you have agreed to. For example, when you enroll in a health insurance plan, you agree that you are able and willing to see their Network Providers. Network Providers are doctors, nurses, clinics, and hospitals that have agreed to accept payment from insurance carriers at agreed upon rates. A doctor may charge you five hundred dollars an hour for his time, but may agree to accept two hundred dollars from the insurance carrier. 

Some insurance plans only allow network providers and will assign you to specific doctors and specialists. They plans are called HMOs, and they may be cheaper overall, but your choices are limited. Other insurance plans, called PPO or Preferred Providers, will allow more choice between doctors but still require you to stick with a specific network. In these plans, an insurance carrier may refuse part or all of the payment requested by out of network providers, leaving you to pay out of pocket. There is very little you can do about these types of denials, which are called "non-compensable denials."

But there are other types of denials known as "compensable denials." In these cases, the insurance carrier is not outright denying responsibility due to contractual issues, but rather, they have situational objections. For example, the doctor and the service might be covered, but it was billed with the wrong service code, and thus automatically denied by the payer or processor.  The treatment may be allowed, but only after a certain treatment is tried first.  This is common with medication denials, when an insurance carrier might require a cheaper or more common treatment first before allowing a more expensive or complicated option. Sometimes there was no reason to deny payment, and the claim simply needs to be resubmitted. 

In some cases, denials don't mean the insurance carrier won't pay--it just means the insurance carrier won't pay right now. 

Contact Patient Services Solutions for help understanding your EOB. We will explain what the insurance carrier did or did pay, what your benefits entitle you to, and if there is a way to submit an appeal or reconsideration for payment. Our experienced agents can help you through the process from the start until a response is received or all options are exhausted.  You don't have to accept a denial for necessary healthcare treatment.