Navigating Insurance Appeals

If you are healthy enough not to need many medications or mobile enough not to need many assistive devices, you may not have received a denial from an insurance company lately. I am fortunate enough to fall into those two categories, but almost all of my patients are not so lucky. This week, I had the extreme displeasure of decoding one of these denials, and I think the experience is worth recounting here as an example of some of the for profit insurance woes I wrote about a few weeks ago. I would also like to add that this particular patient has a PhD, and he brought the paperwork to me after 6 days of trying to decipher it at home by himself with no success. If he can’t figure out how to advocate for himself after an insurance denial, no one can.

This patient handed me a stack of papers. He started by showing me that he couldn’t figure out the order in which they were supposed to be read. Only half of the pages were double sided and there were several blank pages in the mix. There was a numbering system at the top AND at the bottom of the page...sometimes. The top of the first page read “page 1 of 7”, and the bottom of the first page read “page 1 of 13”. The top of the second page read “page 2 of 7”, and the bottom of the second page read “page 3 of 13”. The top of the third page had no page numbers at the top, and the bottom of the third page read “page 6 of 13”. It’s worth noting that there were 11 total pages (not 7 and not 13), including the blank pages; without those, there were 9 total pages. We placed the pages in some semblance of an order, but honestly I'm not sure what was intended here.

After guessing at the page order, it took me 3 read-throughs to identify the actual denial, which stated that the medication requested had been denied because it wasn’t medically necessary. On a separate page, there was a sentence indicating that no medical documentation had been provided by the physician to prove medical necessity. On yet a different page, there was a phone number listed where my patient could obtain the decision making criteria for coverage of the medication. We wrote that phone number down.

We next looked for information about appealing the denial. On the front of one page, there was an extreme amount of detail and direction about an appeals process that would take 30-60 days. Apparently this slow process requires the patient to write a letter disagreeing with the decision, snail mailing it to the insurance company, and hoping that it both arrives to its intended location and is persuasive enough to overturn the decision. On the back of that page, there were 2 sentences detailing an appeals process that takes only 72 hours and takes place over the phone, with medical documentation provided by a physician via fax. I'm not sure who would choose a 60 day correspondence via snail mail over a 72 hour correspondence via phone, but the second option feels more likely to be effective. Surprisingly, or unsurprisingly, the seemingly more effective option was less obvious in the letter, with markedly less information provided. We wrote down the phone number for the quick appeal process.

The patient left with an itemized list of things to do, and all the necessary phone numbers written under each step. First, he will call his physician to find out if the proper documentation was sent to prove medical necessity. Next, he will call the insurance company to obtain the inclusion criteria for coverage of the medication. Finally, he will call the insurance company at a different phone number to initiate the appeal process, and use the list of criteria to make his case about why the medication should be covered in his case. It took us a full 20 minutes of paper shuffling and jargon decoding to come up with this list and these phone numbers.

The data about insurance denials and appeals is actually fascinating (nerd alert). The data that I found is only for plans available through the ACA marketplace, and because it takes a while to compile this data, the most recent year I could find was 2019[1]. So, here are the facts. In 2019, 17% of marketplace insurance claims were denied. The rates of denial vary based on individual insurance, with the hightest rate of denial at 57%. Yes, there is an insurance plan circulating that denies more claims than it pays. It’s worth noting that Anthem BCBS plans filled out the entire the top 5 highest claim deniers. The study I read sorted denials into 5 categories:

-denied due to lack of referral or pre-authorization

-denied because it’s an excluded service

-denied for medical necessity (non-behavioral health)

-denied for medical necessity (behavioral health)

-other.

72% of denials were classified as “other”, which is intriguing, since I can't think of a legitimate reason for denial outside of the other four categories. Also interesting to note - legally patients are guaranteed the right to an “external review” if their initial appeal is denied, whereby they can request that someone not affiliated with the insurance company review the case. This external review is only guaranteed for denials based on medical necessity, which only made up 0.8% of total denials in 2019.

However, across all denials for the year of 2019, only 0.2% of denials were appealed. And of these appeals, at least 50% were reversed, meaning that the service or medication requested was eventually covered by insurance. It makes me wonder whether patients are aware that an appeals process exists at all, or if the instructions for beginning the appeals process are so confusing that the whole thing seems insurmountable. I know in the case of my patient, the appeals instructions were buried in pages of nonsense, there were two sets of contradictory instructions, and both processes required multiple layers of preparation work prior to initiating the appeal in order to be successful.

This is kind of a jaded take on the situation, but it’s my sincere belief that insurance denials and appeals are confusing by design because it’s financially beneficial to insurance companies to deny services. Because they are publicly traded companies that operate for profit, stockholders are actually the stake holders in their business decisions, not the patients for whom they are supposed to provide medical coverage. If a company denies 30% of all claims received, and only 0.2% of these are appealed, resulting in the overturning of 0.1% of the denied claims, the insurance company can increase their profits without raising their premiums too much. Mailing out confusing instructions with denials is a business strategy. People can’t use benefits that they don’t understand, and they can’t appeal denials if the instructions are too convoluted or hidden to find.

I have years of experience working with insurance denials/appeals, and I am fortunate enough to work in a clinic that 1) allows for hour long, one on one visits for every patient and 2) does not put pressure on me to bill a certain number of units per visit. It took me 20 minutes to read and decipher the insurance statement, and to write out a plan of action for my patient with step by step instructions to appeal the denial. In a busy clinic that is production focused, the conversation would be different. The patient might mention that they were denied by insurance, and the therapist might say something generic like, “Oh, well, you can appeal the decision! Call your insurance company to ask about it” before moving on to the next thing. Sometimes, providing compassionate care involves spending time working with patients to figure out the most beneficial next step, even if this process does not qualify as being directly in your scope of practice. Reading insurance denials is not physical therapy, but my patient receiving the correct medications for his diagnosis does directly impact his functional performance, as well as his ability to participate in physical therapy in the future.

The insurance system is stacked against patients in a lot of ways. If you or a patient receives an insurance denial for something really necessary, it’s always worth appealing the decision. Over 50% of denials are overturned! If you work in a busy clinic without time to sit down and decipher the situation, keep the local health ombudsman’s phone number on hand – it’s their job to help patients process appeals and navigate confusing health systems. Payment systems are designed to be confusing, and they change frequently. We can help by telling patients their rights, understanding the systems we participate in as providers, and helping people advocate for themselves!

[1] https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans/