Fight a denied health insurance claim-and win: learn how to appeal a decision.

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IT WAS SUPPOSED TO BE AN ENJOYABLE afternoon. Last March, 88-year-old Samuel Coley St. was on his way to his 7-year-old grandson Chase's birthday party when he suddenly felt dizzy. At first he shrugged it off, but when he noticed that his heart was beating rapidly, he took his pulse. Counting 120 beats per minute, he called out to his son, Samuel Jr., "What's the normal heart rate?" When Samuel Jr., 49, replied that it should be in the 70s, their plans changed, and father and son headed to the emergency room.

They were stunned by the diagnosis. "There were three major things wrong with his heart," says Samuel Jr. The condition was so serious that doctors admitted him immediately to insert a pacemaker. Samuel Sr., who was visiting from New York, remained at Duke Raleigh Hospital in Raleigh, North Carolina, for several days. He then spent another 30 days at a nearby convalescent center. "I did not feel comfortable with him going back to New York and restarting the process," recalls Samuel Jr., noting that his father's doctor recommended that he not travel right away.

But just as the family started to adjust to the news of the illness, another blow followed. Shortly after Samuel St. left the convalescent center, his insurance provider, Health Insurance Plan of New York, denied the claim and the bills started coming in. The tab was in the neighborhood of $75,000, an impossible amount for the elder Coley to pay.

Most of the retired carpenter's liquidity was tied up in paying for the care of his wife, Mollie, who suffers from Alzheimer's disease. "We would have done anything we could do to help him," says Samuel Jr., a musician. But with a wife and four children of his own--three under the age of 13--Samuel Jr. admits that he didn't have $75,000 at his disposal.

When the hospital staff started calling to find out when they would receive payment, Samuel Sr. was horrified that it appeared he wasn't honoring his debts. "I'd paid for insurance all my life," he says. "I wasn't trying to get away with not paying them."

Though it's difficult to track the number of health insurance claims that are denied each year, cases such as Coley's are being played out across the country. In New York alone, consumers appealed more than 20,000 denied claims in 2006--and that does not take into account the number of people whose claims were denied but who accepted their insurer's decision.

But accepting a claim denial at face value may be a mistake. In New York that same year, HMOs reversed an average of 43% of their denied claims and commercial insurers reversed 17% of their decisions following an appeal.

Recognizing that consumers may need help appealing such cases and navigating the healthcare system in general, patient advocacy firms have sprung up to fill that niche. They act as intermediaries between patients, doctors, and insurance providers. "We have to think about our health coverage like we would anything else that we buy," says Laura Valentine, director of client services for CareCounsel, a patient advocacy company based in San Rafael, California. "When it comes to our own care, we don't have a tendency to be as great of a consumer as we should be."

If you or a family member have had a health insurance claim denied, you can and should appeal the decision. Read on for a step-by-step guide on how to effectively go through the appeals process and increase your chances of having a claim paid.

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THE ROOT OF THE PROBLEM

Health insurance claims can be denied for any number of reasons: "It could be a simple billing and coding error, or there could be a piece of information that needs to be submitted by the doctor," says Erin Moaratty, quality assurance officer at the Patient Advocate Foundation. Based in Newport News, Virginia, the organization helps patients resolve insurance disputes. Typically, only services deemed medically necessary will be paid for, meaning claims for exploratory or cosmetic treatments are generally denied. What's more, failing to follow insurance company procedures can lead to a denial. For example, if a plan requires pre-authorization for a certain surgery and you fail to get it, the insurer may not pay.

If a claim is denied, you first need to have a clear understanding of the rationale. As a policyholder, your insurance company will send you an Explanation of Benefits--a form that lists what the insurer paid for the claim, as well as any reasons the claim was denied. If you don't receive a written explanation, call your insurance company. "I always recommend keeping a journal of what number you called, and get the name of who you spoke to," says Daniel J. Tann, a Philadelphia-based attorney who has represented consumers in denied claims cases. "If they don't give you a name, ask for an employee ID number."

When the bills kept coming, both Samuel Jr. and his sister Denise Kirkland, 55, of New York City called HIP on their father's behalf. The siblings also have a healthcare power of attorney in place--a legal document that authorizes them to make healthcare decisions for their father. Kirkland, a schoolteacher, made calls during her lunch break and on the way to her second job working with children with disabilities. "One department was telling me one thing, and another department was telling me something else, and nobody seemed to know what the other person was doing." Finally, she and her brother learned that the problem centered around their father's North Carolina hospital stay. HIP said Samuel Sr. should have come back to New York for treatment by doctors within its provider network, which frustrated Kirkland. "When someone gets sick away from home and is told they cannot travel, what are you supposed to do?"

The Coleys' next step was to explain to the hospital why the bills weren't being paid, a move that's critical to protecting the patient's credit rating. While you're starting the appeals process, it's important to keep the doctor's office in the loop, and ask if the account can be put on hold while the process runs its course, advises CareCounsel's Valentine. While it's up to their discretion to do so, many healthcare providers are willing to work with patients appealing a denied claim.

When Samuel Jr. explained his father's situation, the billing department not only agreed to wait out the appeal, they also brought a resource to the family's attention that would turn out to be critical: a patient advocate to help them make their appeal.

NAVIGATING THE PROCESS

Samuel Jr. was relieved to learn that consumers don't have to battle insurers alone. Some patient advocate organizations, such as the Patient Advocate Foundation, offer free assistance. Others charge a fee, typically based on the length and complexity of the case. For example, Philadelphia-based HealthCare Advocates Inc. charges $50 for a month of assistance and $300 for a year on top of a $19.95 annual membership fee. "We work with the insurance company to get the claim paid for you," says President Kevin Flynn. "We know the laws, we know the loopholes, we know how to get around them? If your health insurance comes through your employer, check with human resources to see if you can take advantage of an employer-sponsored advocate such as CareCounsel.

Whether or not you use an advocate, the next step is to review your insurer's appeals process and follow it to the letter. Because every insurance company has different procedures, it's important to pay particular attention to the amount of time you have to appeal, says Moaratty. "A lot of times it's a 60-day window [from the date on the denial letter], but it does vary. Depending on the insurance carrier, if you've bypassed that, you've basically exhausted your efforts and you can't go further."

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The crux of an appeal is a letter stating why the claim should be paid, as well as providing any documentation that proves that the procedure was medically necessary. Your doctor can help you strengthen your case with the appropriate paperwork In Samuel Sr.'s case, "We had to prove that the doctors were correct in admitting him and providing the services that they did," says Margie Griffin, a senior case manager for the Patient Advocate Foundation. "We wrote up the appeal letter pointing out the major facts in the doctor's medical notes." Any other information about the disputed procedure, such as medical studies, can be included as well. Once all the materials have been gathered, send them to the insurer using a delivery service, such as certified mail, that confirms delivery.

The insurance company will make a decision, generally within a couple of months; though decisions can be expedited in urgent care cases. If the denial is reversed, the insurer agrees to pay the claim, but even if the denial stands, you still have options. Many insurers allow up to three appeals so if you lose the first one, you can try to make your case again. But do more research so that you can make a stronger case for medical necessity. For example, a new medical study may sway the decision.

If your insurer's appeal process does not yield favorable results, you may be able to appeal its decision to your state's external review program. In such cases, an independent company or board made up of medical professionals will review the case. Programs vary from state to state; in some states, the appeal is strictly done by filing paperwork, while in others, you may be called to speak with the independent reviewer. The Kaiser Family Foundation provides information about each state's external appeals process at www.kff.org/consumerguide/states.cfm.