5 Reasons a Claim May Be Denied

5 Reasons a Claim May Be Denied

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Believe it or not, there are only a handful of reasons that may lead to a health care service not getting approved or a claim not being paid.

They fall into these five buckets.

The claim has errors. 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. If you find an error, ask your provider to correct the information and submit your claim again.

You used a provider who isn’t in your health plan’s network. Some plans only cover care if you use providers and facilities in your plan’s network. If you go out of network, your plan may not cover any of the costs. Other plans may only cover some of the out-of-network costs, and you have to pay the difference.

Your care needed approval ahead of time. Some procedures, like CT scans, MRIs and certain surgeries, usually require prior authorization. If a claim isn’t covered because it wasn’t authorized in advance, talk to the provider who ordered it. Your provider may be able to submit patient records that show you needed the service.

You get care that isn’t covered. Your health plan may not provide that benefit. For example, your plan may not cover weight-loss surgery. In that case, it doesn’t undergo medical review. If your plan doesn’t cover it, the procedure won’t be approved. This is called a coverage limit or contract exclusion.

If you lost health plan coverage, your claim may not be covered. This may happen if you don’t pay your monthly premiums or run out of COBRA.

The claim could also be denied for a medical reason. These types of denials may include:

  • The services are not considered medically necessary.
  • The right level of care wasn't provided given your condition.
  • The treatment hasn’t been proven effective or is considered experimental for your condition.

The claim went to the wrong insurance company. If you have a second health plan, like one from your employer and one from your spouse’s employer, the provider may have billed the wrong company. Or your care provider may have outdated information if you changed insurers. When you get your EOB, check to see if it is from the right health plan, then contact your provider.

Sources: Reasons for Health Claim Denials and What You Should Do, leaving site icon VeryWellHealth, 2023; What to Do When Health Insurance Won’t Pay, leaving site icon Insurance.com, 2023; Appealing a Health Care Decision, HealthCare.gov leaving site icon

Originally published 6/30/2020; Revised 2022, 2023

Anonymous
  • My wife has had a million issues recently when submitting claims. Apparently her first name "MARIA DEL CARMEN" is too long and many of her claims bounce and the process to solve the issues has taken, in some instances, over a year. Is there a way to define an ALIAS (like CARMEN) that could help fix this problem? 

  • This is not completely true, I have been with bcbs for about 15 or so years. I was on their PPO plan and they paid everything no problem no headaches, no major pre-authorizations except for one and it took no time to get approved for it. Well I had to change plans because of financial issues, stayed with BCBS because I have been with them so long. Well now they wont approve medication I have been on for years and in order to get approved my doctor has to go through hoops to get it. I have to call so many doctors because even though they are in network they won’t take the insurance because of there pre-authorization policy for my plan. Your article makes it sound like it’s a simple thing and can be corrected and get approval. No it is not. It takes months and a doctor just filling out the pre-authorization forms is not enough, you will get denied and then your doctor and there staff have to go through hoops to send them proof why you need to take this medication and it has to be according to BCBS regulations. The lower your plan is the more time it takes for approval, if your plan is paid going through marketplace be ready to have the works for most of your health needs. I have worked with insurances for many years and I know that the lower your policy is the more the insurance push back on approvals. More expensive the policy the less push back you get. It’s the way to make more money and it’s legal but sad. Your article is not a complete lie but it’s not the whole truth either. They know that the more your Doctor has to go through to get something they want you to take or a procedure you need the doctor will have to Change your treatment in order to help you, but not always what you actually need and the insurance is ok with that because it’s in that policies projected budget plan. The best thing is just because you finally get approved and it’s something you take or have to do for a long time, you will have to go through all that again because pre-authorizations have a expiration date.