How to Appeal When Your Insurance Refuses to Cover Therapy

Insurance claim denials are common. A Kaiser Family Foundation analysis found that in 2017, health insurance marketplace insurers denied an average of 18% of claims for in-network providers. When your claim is denied, you may have to pay your therapist out-of-pocket. This unexpected bill may make it difficult to afford more therapy sessions, potentially thwarting the progress you make in therapy. While a claim denial can be frustrating, it’s not the final word on the topic.

Appealing a claim begins with understanding the reason for the denial. Once you understand the situation, you can internally appeal to your insurer. If the insurer still won’t pay, you can request an external review.

Common Reasons Insurance Claims Are Not Accepted

Before filing an appeal, you need to know whether your claim was rejected or denied. A rejected claim is one the insurer never processed, usually because of errors in the claim (such as a misspelled name). A denied claim is a claim the insurer has processed and declined to cover, usually because the insurer believes the services included on the claim are not covered.

Common reasons insurance claims are rejected or denied include:

• The claim includes a bill for uncovered services. This might happen if your coverage only kicks in when you hit your deductible or if you do not have coverage for the specific services you received.
• You were supposed to seek pre-authorization for care. This often happens when you see a specialist.
• Your provider sent the claim to the wrong insurer. If you’ve recently changed insurance plans, correcting this could be as simple as resubmitting the claim to the right insurer.
• There are transcription errors in the bill. For example, your birthday might be wrong, or your name might be misspelled.
• The provider who submitted the bill used the wrong CPT code (this tells insurers what kind of service you received).
• You used an out-of-network provider. If you change insurance plans, a mental health professional who was in-network for your old plan may be out-of-network for the new plan.

Insurers are required to notify you in a timely manner if they have denied your claim. This notification will typically explain why the insurance company chose not to pay. What counts as a “reasonable time frame” depends on the type of claim you’ve submitted.

• Insurers must notify you within 72 hours if you are seeking pre-authorization for urgent care.
• Insurers must notify you within 15 days if they are denying pre-authorization for non-urgent treatment.
• Insurers can take up to 30 days to notify you about services you’ve already received.

Making an Internal Appeal

If your claim has been rejected, this means it was never processed. You or your mental health care provider must resubmit it. This creates a new claim. It is not the same thing as an appeal.

If the claim was been denied, then you need to file an internal appeal. To appeal the denial, consult your explanation of benefits (EOB). An EOB is a document that details each service in the claim. It also explains why the claim (or specific services within the claim) was denied. Most insurers use specific codes to indicate why a claim was denied, and many EOB documents contain a key to these codes. If your EOB contains codes but no key, contact your insurer to ask for a key.

Complete the forms your insurer requires for the appeal. If the insurer does not require certain forms, you can send them a letter instead. Your letter should include:

• Your name, claim number, and health insurance ID.
• Information about the denied claim, such as the date, billing code, and the services you received.
• The reason for the claim denial, as well as the reason you think the claim should be reconsidered.
• Any additional information you’d like added to the claim. For example, if you received pre-authorization for a denied claim, note this.

The review should be succinct and easy to read, without needless information or allegations. Stick to a few paragraphs at most.

You have 180 days from the date of the claim denial to file an appeal. If you are appealing for services you have not received yet, your insurer must notify you of their decision within 30 days of receiving the appeal. If the denial is for services you’ve already received, the insurers have up to 60 days to respond to your appeal.

Know Your Rights Under MHPAEA

The Mental Health Parity and Addiction Equity Act (MHPAEA) requires that insurers provide comparable coverage for mental health and physical health conditions. For example, if an insurer charges a $20 copay for a visit to a doctor, it generally cannot charge an $80 copay for a visit to a comparable mental health professional. It also cannot enact restrictions on mental health coverage that it does not also apply to physical health conditions—such as requiring pre-authorization or only extending coverage after you hit a deductible.

Despite this law, some insurers may still unfairly reject mental health claims. Citing the MHPAEA in your appeal may make your claim more likely to be accepted on resubmission.

Getting an External Review

If the insurer upholds their denial, you have a right to an external review. In some states, the federal government’s Department of Health and Human Services will select a reviewer to oversee the process. This reviewer is not an employee of the health insurer.

If the federal government does not oversee the process in your state, your insurer will likely contract with an independent third-party reviewer. Some states offer alternative external review options that extend more rights to consumers, so check state regulations before filing your appeal.

To begin the external review process, issue your request for an external review within four months of receiving the denial. The request must be in writing. Include all information you included in your initial review in the external review. If new information has become available, make sure you include that too.

In standard external reviews, you will receive a final decision within 45 days. If you appeal a denial of services for urgent care, you can seek an external review before the internal review process is completed. These expedited reviews have to be completed within 72 hours.

If the external review overturns your health insurer’s decision, your insurer is required to abide by their decision and cover the claim. If the reviewer upholds the denial, you will be responsible for paying the claim. That means you’ll need to talk to your mental health care provider about payment arrangements. In some cases, a mental health professional may be willing to work out an extended payment plan.

Many states offer help understanding and appealing claims denials. To find the Consumer Assistance Program in your area, click here.

References:

1. External review. (n.d.). Retrieved from https://www.healthcare.gov/appeal-insurance-company-decision/external-review
2. Gerber, J. (n.d.). What is the difference between denied claims and rejected claims? Retrieved from https://info.medcorinc.com/blog/what-is-the-difference-between-denied-claims-and-rejected-claims
3. Glover, L. (2016, March 11). 5 reasons your health insurance plan will deny your medical claim. Retrieved from https://www.nerdwallet.com/blog/health/5-reasons-health-insurance-plan-deny-medical-bill
4. Internal appeals. (n.d.). Retrieved from https://www.healthcare.gov/appeal-insurance-company-decision/internal-appeals
5. The Mental Health Parity and Addiction Equity Act (MHPAEA). (2016, October 27). Retrieved from https://www.cms.gov/cciio/programs-and-initiatives/other-insurance-protections/mhpaea_factsheet.html
6. Pollitz, K., Cox, C., & Fehr, R. (2019, February 25). Claims denials and appeals in ACA marketplace plans. Retrieved from https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans
7. Resubmission versus corrected claim. (n.d.). Retrieved from https://therabill.zendesk.com/hc/en-us/articles/217247143-Resubmission-versus-Corrected-Claim

The preceding article was solely written by the author named above. Any views and opinions expressed are not necessarily shared by GoodTherapy.org. Questions or concerns about the preceding article can be directed to the author or posted as a comment below.