First, this guide only covers a few reasons your health insurance claim could be denied. Your claim could be denied for a number of reasons. In general, the process for appealing an insurance denial is the same. You directly appeal to the insurance provider who denied your claim, and if they do not grant your appeal, you can seek an independent review. Your claim will be reviewed by an independent third-party to determine if the insurance denial was lawful. 

Denial of coverage because treatment was “not medically necessary.”

This is a common reason for insurance coverage denials. The primary reason is because the term “medically necessary” is extremely vague. There isn’t a generally accepted definition. Insurance policies are supposed to have a definition in the policy. Sometimes they will just defer to the Medicare or Medicaid definition. Regardless, the lack of clarity in what is and is not legally medically necessary leads to this reason being utilized by insurance companies to deny coverage regularly. If this happens to you there are steps you can take. 

Treatments and practices often fall within the scope of medical necessity when (1) they are generally accepted within the medical practice, (2) are not purely elective, (3) are not experimental, and (4) provide significant benefits to the patient. Again, these four factors are not dispositive of whether something is medically necessary, but if your treatment or medical practice meets each of these four factors it is likely medically necessary. 

If you are denied for this reason you have the right to appeal the hospital’s decision. A good starting point is to obtain a copy of your chart notes and see what your physician wrote about the treatment or practice that the insurance company is now refusing to cover. Additionally, asking your doctor or other medical experts to explain why your treatment was medically necessary is extremely helpful. 

Denied coverage because the provider was “out of network.”

Insurance providers have negotiated rates with specific medical providers that they have agreed to pay. When a provider is “out of network” it means that your insurance provider has no set deal with that hospital. So, if you go to an out of network provider, and your insurance company refuses to pay them all or a part of what you were treated for, then the bill will get sent to you. Fortunately, Washington legislation that went into effect in July, 2019 gave patients some protection against this issue. 

RCW 48.43.093 requires health insurers to cover services from a hospital’s emergency department for medical services that are necessary to screen and stabilize their insured, even if those services were received from an out-of-network provider. Further, as long as the patient reasonably believed they were in an emergency situation, they cannot be required to obtain prior authorization from their insurer. Keep in mind that rules regarding copayments, coinsurance, and deductibles that apply to in-network hospitals will likely still apply in this type of situation. 

Can your Washington health insurance provider cancel your plan?

Like virtually all legal answers – it depends. Health insurance providers can cancel your insurance, but they must follow very specific rules before they can do so. 

As a caveat, this blog does not address the rules for health share plans. A health share plan is a cooperative, often affiliated with a church, and is not health insurance. The rules in this blog specifically address health insurance. 

The first thing to check if your insurance is canceled is your policy. Basic contract rules apply. The terms of your insurance policy must allow for the insurer to cancel your coverage, and may set out rules for doing so. Most will contain a provision that states that the insurer will cancel your coverage if they choose to. However, if your insurance is canceled it’s always good to get a copy of your policy to make sure that the reason the insurer is claiming for cancellation is actually one allowed by your policy. 

Second, under federal law an insurer can never retroactively cancel your insurance unless you committed intentional misrepresentation or fraud on your application. Before the Affordable Care Act, insurance companies would commonly find some mistakenly undisclosed or other immaterial issues with an application and use it as a reason to not cover services that took place during the covered period. Federal law now seriously limits their ability to do that. 

Third, the insurer is required to give you notice that they intend to cancel your coverage in the future and state the reason why. Under Washington law if your health insurance company cancels your policy for any reason other than nonpayment of premiums, they must personally deliver or mail you a letter 45 days before your coverage ends telling you the actual reason they are canceling your coverage. If the reason for cancellation is nonpayment of premiums, then they only have to give you the letter 10 days before your coverage ends. If you think that they have made a mistake, or you can fix the issue (such as by paying unpaid premiums), you should appeal their decision by writing them a letter ASAP. 

If you find yourself in a situation where your health insurance coverage has been canceled, you should investigate why and appeal the insurer’s decision. In some instances, they may be required to overturn their decision, in some instances they may choose to. If the insurance company did not properly follow the procedures to cancel your insurance, or they simply made a mistake, that is your best argument for changing their minds. However, if that is not the case, there is nothing stopping them from having a change-of-heart when the entire situation is explained. 

Conclusion

Remember, if you are denied, you should promptly write a letter to the insurance company who denied your claim and appeal their decision. If the insurance company upholds their denial, you should demand that their decision be independently reviewed. It is not uncommon for decisions to be overturned after independent review. 

If you have been denied coverage and feel an appeal is warranted you can contact Navigate Law Group’s consumer law department. We have experience with helping clients appeal healthcare claim denials in Washington.