Kids and Health Care: When a Claim's Been Denied

Resolving claims disputes starts by contacting your insurance company, which must follow the dispute procedures outlined in your policy (also why it's important to hang on to your insurance documents).

If the dispute is not resolved by the insurance company, you may appeal to the proper state or federal agency -- the state Insurance Department; the state Department of Health for managed care plans; the federal Health Care Financing Agency for Medicare -- managed care plans; and the state Department of Public Welfare for Medicaid -- managed care plans.

But start with the company. If it has denied your claim, ask why the claim was rejected. Ask in writing...and ask that the response be in writing. Written correspondence marks the chronology of your dispute and establishes exactly who said what at which point along the way.

If the company's answer involves a service that isn't covered under your policy (and you believe it is covered), check all relevant claim forms. It could be that the provider entered an incorrect diagnosis or procedure code. That's relatively easy to fix.

Check that your deductible was correctly calculated and that you didn't skip an essential part of the process. Some people choose a high deductible when they're shopping for coverage because it makes the coverage less expensive; later, when they have trouble with a claim, they forget their earlier thriftiness.

If everything still seems to be in order, you can then ask your insurance company to review the claim.

For cases like these, it often helps to keep written records of the following:

• All correspondence with the plan.
• Claims forms and copies of bills.
• Phone conversations -- the date and time, the people you speak with and the nature of each call.

If the insurance company still denies your claim or insists you take it to court for your money, don't be intimidated. And don't stop corresponding. Ask the company for the specific language in your policy or in state law that allows it to deny your claim.

In your exchanges with a health insurer, ask many questions -- but try to say as little about your own opinions as possible. An insurance company determined to "manage cash-flow" by delaying claims isn't likely to be swayed by any of your arguments. It doesn't want to be convinced.

What you're trying to develop is an argument -- supported by a paper trail -- that will convince an arbitrator or regulator that your child's claim should be paid.

Most health plans have some sort of appeals process that you and your doctor may use if you disagree with the health plan's decisions. Doctors and hospitals know this. If you're having trouble getting a medical expense paid, let the provider know that you're challenging a decision. The provider isn't usually a formal party to the dispute; but many will allow some flexibility with their bills while you work the review process.

While state insurance commissioners usually have no legal authority to force an insurance company to pay an individual claim, the commissioner can fine a company or take other punitive actions if an insurance company makes a practice of unfairly underpaying or denying claims.