Offering health insurance to your employees? Be ready to step in if they face a claims-related issue. Whether it’s a denial or another challenge, being supportive can make all the difference.

The Centers for Medicare & Medicaid Services (CMS) says that in 2021, nearly 17% of in-network claims were denied by HealthCare.gov participating insurers. Some of the reasons for denial included:

• Claim was for excluded service(s): 13.5%
• Lack of required preauthorization or referral: 8%
• Medical necessity not supported: 1.7%

The majority of plan-reported denials fell under the category of “all other reasons,” which accounted for over 75%.

In the 2021 plan year, out of 230 Major Medical issuers in the federal exchange program, 162 reported receiving at least 1,000 denied in-network claims. Across the nation, these insurers reported a total of 291.6 million in-network claims, with over 48 million denied. This amounts to an average denial rate of 16.6% for in-network claims, which is lower than the CMS figure mentioned earlier.

Few consumers appeal their denied claims, and the majority of insurers uphold their original denial decision on appeal. For HealthCare.gov consumers, in 2021, less than two-tenths of one percent of in-network claim denials were appealed. For those that were, insurers upheld the denial in 59% of cases.

If your employees or an insured family member wants to appeal a claim denial, you can be supportive by encouraging them to follow the tips below.

Always Review Your EOBs

Make it a habit to regularly review your Explanation of Benefits (EOB). Each EOB provides a summary of how the claim is being handled. It usually includes how the health plan and patient/insured will share treatment costs – the allowed amount under the plan and whether certain services are subject to a deductible and/or copay or coinsurance.

In some situations, where the health care provider is not an in-network or preferred provider, the insured could be billed for services exceeding the allowed amount. If a doctor or facility is an in-network, preferred provider, balance billing may not be allowed.

Review the Policy Claims Appeal Processes

Each insurer establishes its own claims appeal process, subject to guidelines established by regulators like the California Department of Managed Health Care or the California Department of Insurance. Many plans have an “internal appeals process” and a “external review process.” With an internal appeal, the member/insured asks the insurance company or administrator to conduct a full and fair review of its claim denial decision. If the case is urgent, the insurance company must accelerate this process.

If the initial claim appeal is denied, the insured may be able to take their appeal to an independent third party for reconsideration. The California Department of Insurance offers information online for those experiencing a problem with their health insurance policies.

Be Prompt in Filing a Claim Appeal

There is typically a set period during which you must submit paperwork and other documents for an appeal. Some health plans may require the use of certain company forms. Paperwork can often be submitted online, which is usually the fastest way. If not submitted online, you can mail or fax the forms to the plan or administrator.

When a claim appeal is submitted, it will be reviewed by a claim processor, who will re-check the initial claim for accuracy, completeness, and whether the service is covered under the insurance contract. The processor will also review other information, such as correct application of the plan copay, coinsurance, whether a deductible applies, and whether the insured is near or at the plan’s out-of-pocket maximum.

Always advise your employees to ask questions if they are unsure of why a health claim is being denied, or if the insurer pays a lower-than-expected amount toward a claim.

Your health insurance broker or agent may also be available to provide support in connection with a claim appeal by one of your employees or an insured dependent.