Insurance companies aren’t allowed to just say “No” to appeals—every denied claim should have a reason. If the claimant feels the reason is unjustified, they have the right to appeal.
Partial denials are also grounds for appeal. This applies to almost all types of insurance claims in Iowa, including medical claims, worker’s comp claims, home insurance claims, and personal injury claims.
However, the claims process is complicated and often opaque to the average claimant. Even for the first stage of the appeals process, it may be necessary to consult a lawyer for help in following the right process and collecting the required documentation.
What Is the Procedure for Appealing a Denied Claim?
After a claim denial, the first option is to file an internal appeal. This is a request to the insurance company to review its decision fairly and provide detailed feedback. Usually, all the claimant needs to do is write a letter to the insurance company requesting an internal appeal.
After writing the appeal request letter, it’s important to attach supporting documents. Medical providers can usually provide support for the claim. For example, if a claim was denied for being “not medically necessary,” the healthcare provider can provide information to help overturn this decision.
Internal appeals are also known as administrative remedies or reviews. Most companies have a specific time period within which claimants can request a review, usually 2–6 months after the initial denial.
Sometimes the claim is denied due to reasons that can be solved or worked out easily. For example, incomplete or missing information or using “out of network” providers could be solved during the internal review.
Filing an Administrative Review
Every insurance company has its own internal appeal process. It’s important to follow this process to the letter to avoid delays. The appeal letter should also contain all the required information, including the claimant’s name, claim number, and a detailed explanation of why the claim shouldn’t have been denied.
Filing an Administrative Review can be frustrating. However, it’s important to keep emotion out of the appeal and present the case in a matter-of-fact way supported by available information.
It’s particularly important to understand why the insurance company denied the claim in the first place so that the letter can supply counter arguments and supporting evidence.
Why Was the Claim Denied?
The Kaiser Family Foundation recently carried out a study in 2021 on claim denials and appeals. They found that 14% of claims are denied due to excluded services, 9% due to lack of referral or preauthorization, and 82% due to “other reasons.”
Sadly, only 1% of people whose claims were denied appealed the decision.
Unless the claim was denied in bad faith, the insurance company should have sent a “determination letter” explaining why it won’t cover the claim. Review the letter and figure out how to appeal the denial, and take some time to figure out your appeal strategy.
Here are some examples of arguments that may be used to ask for a review depending on the reason for denial:
- Lack of payment: provide legitimate reasons why the payment was missed, such as a change in bank accounts or payroll error; request for a one-time exception
- Out-of-network provider: explain why it was necessary to use the provider, such as emergency procedures or unreasonably long wait times at in-network providers
- Experimental treatments: prove the treatment is medically necessary, is the only available option, is less expensive, or other patients with the same problems have been covered for it
- The procedure is not covered: review the policy documents and provide evidence proving otherwise
After sending the letter, follow up with a contact person in the company until a response is sent. Keep track of all communication and keep records of all dates, times, and summaries of all communications. Also, make copies of all letters and documentation received for future use.
Filing an External Review
If the claim is denied again or the company fails to respond, file an external review. Insurance companies have 30 days to review an appeal and respond unless there are valid reasons to request one 30-day extension.
The external review is done by an external review organization chosen by the Iowa Insurance Division. Again, it’s important to file for an external review within a set time, which will be provided in the internal appeal notice.
In Iowa, the claimant needs to fill out and submit this letter within four months of receiving the denial. It must be accompanied by several documents:
- A final denial letter from the insurance company, or a letter showing that the company waives requirements to go through internal appeal procedures first
- In case of no response from the insurer, attach a copy of the request for internal review and a statement that no response has been received within 30 days
- A signed medical release form, which is included in the letter packet
In addition to the required documentation, it’s possible to add any new supporting information to the letter that may help the organization make a favorable decision. This information must also be sent to the insurer, which gives them a chance to review it and either affirm or overturn its decision.
A regular external review process will take no more than 60 days. The independent review organization can either affirm the insurer’s decision or overturn it. If the decision is overturned and the insurance company is found in error, it must approve the claim or reimburse the claimant.
What If the Situation Is Urgent?
In cases where 30 days are too many to wait for an internal appeal to be approved, it’s possible to request an expedited external review.
Waiting for more than a few days might affect the claimant’s health or jeopardize their chances of recovering and regaining full functionality. Or it could be that admission or availability of care depends on the determination of the claim.
In such cases, it’s necessary to have an expedited external review. The treating healthcare provider must certify the necessity of the expedited process, after which it takes up to 72 hours after receiving the request and documents.
Even after going through the formal appeals process, there are cases where litigation is necessary. For example, if the claim involved is an auto accident claim and the total policy amount fails to cover the cost of treatment, it may be necessary to sue the at-fault party to make up the difference.
Insurance companies can also act in bad faith, opening up grounds for a lawsuit. In worker’s comp claims, it may be necessary to file an ERISA § 502 suit if all the required appeals processes have been exhausted without success.
The courts are the last option when an insurance company is being uncooperative. However, they involve more risk and require more thorough preparation, information gathering, and knowledge of the legal system.
That’s why it’s important to get legal help before deciding to go to court and make sure all other avenues of redress have been exhausted.
Importance of Seeking Legal Advice
The insurance claims review process is complicated. When a claim is denied, going through the policy documentation and letter of determination takes legal expertise to find out which loopholes to exploit.
A lot of the time, insurance companies deny a claim on technicalities or just because they can. Working with a respected lawyer can immediately turn the tables in the claimant’s favor. For instance, sending a demand letter carries more weight than a simple request for appeal.
Sometimes, the insurer is willing to negotiate terms for claim approval. In this case, having an experienced lawyer can help the claimant receive a significantly higher payout under better terms.
If the administrative review processes fail, an attorney can review the claim and determine whether a lawsuit is warranted. They will go through all the evidence available and advice on whether going to court is justified.
Appeal and Litigation Options When a Claim is Denied
Most people don’t realize that appealing an insurance claim is possible, or they feel they can’t fight the insurance companies. This is a mistake because, a lot of the time, the insurance company has either made a genuine mistake or doesn’t want to pay.
It’s important to consult with an experienced des moines car accident attorney to get help with denied claims in Iowa. Plus, with a free first consultation, the team at MSMC is always ready to help you figure out if your claim warrants a lawsuit to help you recover maximum damages.
If your claim has been denied, contact or call us at 515-444-4000 as soon as possible for a free consultation.