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Claim Denied? File That Appeal

by Michelle Singletary

WASHINGTON -- Say what you want about health care reform, but as with many other pieces of legislation that have been passed during the country's recent economic hard times, we are getting some much-needed transparency on a number of personal finance issues. 
     
The Government Accountability Office, the investigative arm of Congress, has been busy fulfilling the requirements of these laws, which call for reports on various concerns from credit and debit card fees to the advice that workers are getting about their 401(k) plans to application and coverage-denial rates for private health insurance. In fact, you might want to bookmark the GAO website (www.gao.gov) so you can periodically check what the agency has to say about these items that directly impact your finances. 
     
For example, let me refer you to a recent report on private health insurance denials, a study that was required following the enactment of the Patient Protection and Affordable Care Act. That's the health care law that has been pejoratively nicknamed Obamacare. Nonetheless, it's because of this law and the resulting GAO follow-up that we got a great piece of advice for people covered by private health insurance. 
     
If you are denied coverage, file an appeal. 
     
The GAO said the data it reviewed indicated that health insurance coverage denials, if appealed, are frequently reversed in the consumer's favor. In looking at data available from four states, the GAO found that 39 percent to 59 percent of appeals filed with insurers in those states resulted in the insurer reversing its coverage denial. Additionally, data from a national study on appeals conducted by a trade association for insurance companies showed that coverage denials were reversed roughly 40 percent of the time. Now, with such limited data, this doesn't mean you have a double-digit chance your denial will be overturned. In fact, in a letter responding to the denial report, the Department of Health and Human Services said GAO's findings underline the great deficiency in information on insurance denials. 
     
Still, the GAO report provides helpful information for the nearly 64 percent -- as of 2009 -- who rely on private insurance for health care coverage, most through employer-sponsored group health coverage. A number of provisions under the Affordable Care Act protect people against the denial of insurance coverage, but until the law is fully implemented, rejections can continue. 
     
A year ago when President Obama signed health reform into law, he said: "Today, I'm signing this reform bill into law on behalf of my mother, who argued with insurance companies even as she battled cancer in her final days." 
     
More than 10,000 people each year have their coverage dropped because they got sick or made a mistake on their application, according to the administration. 
     
The GAO said coverage denials occur for a variety of reasons. People are denied frequently because of billing errors and eligibility issues and "less often for judgments about the appropriateness of a service." When it comes to billing errors, often the denial is because of duplicate claims or missing information. Data from Maryland showed duplicate claim submissions accounted for 32 percent of all denials in 2007. 
     
In its report, the GAO pointed out that consumers have several avenues to dispute coverage denials. They can file an appeal of a denial with their insurer. In most states, consumers can have their appeal reviewed by an external party, such as an independent medical review panel established by the state. And they can file complaints with the state, generally through the department of insurance. For those with group health plans, appeals can be filed with the U.S. Labor Department. By the way, in fiscal year 2010, more than 9,600 complaints related to coverage denials by group health plans resulted in payments totaling nearly $7 million, according to data from the Labor Department. 
     
Here are a few resources you need to check out. For help in dealing with your insurer, try contacting the nonprofit Patient Advocate Foundation (www.patientadvocate.org). For information about the health care law, go to www.healthcare.gov. If you have a pre-existing medical condition and you are having trouble finding coverage, go to www.pcip.gov. On that site you will find information about the new Pre-Existing Condition Insurance Plan (PCIP), which was created last year as part of the Affordable Care Act. 
     
The federal government plans to collect additional information on the extent of insurance enrollment denials and denials for coverage for medical services and the reasons for those denials. Good. Such information should make it easier for people to shop for insurance.

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