Notice Issued to Health Insurers Reminding Them of Legal Obligation to Consumers When Claim Is Denied
News: 2012 Press Release
Insurance Commissioner Dave Jones today issued a Notice to Insurers reminding them they are legally obligated to fully disclose to consumers why a claim for treatment has been denied. According to the California Insurance Code, when insurers deny requested treatment as not a covered benefit they are required to give policyholders the specific provisions in their policy that excludes coverage. In addition, if companies deny coverage for a treatment as not medically necessary, they are required to outline the facts and law on which they based their denial.
"Consumers have the right to full disclosure by their health insurer as to why they are being denied coverage," said Commissioner Jones. "That way they can make a fully informed decision about whether they agree with the decision, or whether they want to contest it."
The California Department of Insurance (CDI) receives nearly 9,000 health insurance complaints a year-about 7,000 involve health claims issues. Commissioner Jones also issued a consumer alert, educating policyholders about their right to appeal to the Department of Insurance when an insurer denies their claim for treatment. There is a fair chance a review of the decision could go in their favor. He reminds policyholders they have a right to appeal to the company and also ask CDI to review the denial.
"Dealing with a complicated medical condition for yourself or a loved one is stressful enough," said Commissioner Jones. "If your health insurer won't initially cover your treatment, that's not the end of it. As a consumer, you have options. You may file a Request for Assistance with my Department whenever you have problems with an insurer involving a claim. Denial by an insurance company is not the final word."
If your claim was denied because the insurer determined the treatment is not medically necessary or was experimental, you may request an Independent Medical Review (IMR) from the Department at no cost to you. However, you must first file an appeal of the denial with your insurance company, using the company's internal appeals/grievance process while keeping several important steps in mind:
- Find out Review the reason for the denial and review the policy language supporting the denial;
- Submit all necessary support for treatment, with doctors statements and medical records;
- Provide research showing the treatment requested is accepted and appropriate, if possible.
Commissioner Jones reminds consumers it's important to be aware of all IMR deadlines. If the insurance company upholds its decision or delays its response to the appeal/grievance, then file a Request for Assistance or an IMR with CDI. This request must be made within six months of the insurance company upholding its decision on appeal. The IMR process involves an expert independent medical professional reviewing the medical decisions made by the health insurer.
An IMR can be requested if the insurance company's decision involves health claims that have been denied, modified, or delayed by the insurance company because a covered service or treatment was not considered medically necessary; health claims that have been denied for urgent or emergency services that a provider recommended was medically necessary; health claims that have been denied as being investigational or experimental.
Six Steps to IMR
- Notify CDI to request an IMR by filling out an application;
- Agree and provide written consent to participate in IMR;
- The CDI determines if the request is eligible for IMR;
- The IMR Organization will have 30 days to review once all information is gathered-unless the request involves an imminent and serious threat to health, which can be expedited and a decision to the insured, the insurance company, and the Insurance Commissioner
- The IMR organization will send the decision to the insured, the insurance company, and the Insurance Commissioner
- The Commissioner will adopt the recommendation of the IMR organization and promptly notify the insured and the insurance company. The decision is binding on the company.
If the company denies treatment as not a covered benefit, or if CDI finds that the issue does not involve a disputed health care service, CDI will review the company's decision to make sure it's accurate.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.