If an insurance company denies a claim, immediately review the denial letter for the specific reason, review your policy coverage, and gather supporting documentation like photos, bills, and witness statements. File an internal appeal, initiate an external review if necessary, and consider contacting your state's Department of Insurance or a legal professional if the claim is improperly handled.
Since insurers base premiums on how likely policyholders are to file a claim, a claim that's denied can cause your rates to go up — though not as much as if the claim was approved. Even discussing a claim with an agent, without actually filing it, can impact your premiums.
Contact your insurance company
If you still feel that your claim was unfairly rejected, contact your insurance company and tell them you're unhappy. All insurance companies are required by law to have a formal complaints process, so following this process will get you the fastest possible resolution.
You can ask that your insurance company reconsider its decision. Insurers have to tell you why they've denied your claim or ended your coverage. And they have to let you know how you can dispute their decisions.
If you are still unsatisfied with the decision, you can appeal the insurer's decision to the Financial Ombudsman – within 6 months of receiving the insurer's response to your complaint. The Financial Ombudsman is an independent organisation that can help you resolve disputes with your insurance company.
While most claims remain on your record for five to seven years, the exact length of time depends on a few factors, like your insurance company and the severity of the claim. Usually larger, more expensive claims stay on your record for longer, whereas smaller, less expensive claims might be removed earlier.
Here, we discuss the first five most common medical coding and billing mistakes that cause claim denials so you can avoid them in your business:
Common denial reasons: Missing documents, missed deadlines, incomplete claim forms, policy exclusions, lack of sufficient evidence, coverage lapses, or failure to follow claim procedures often lead to denial.
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Steps to Take After a Claim Denial
In 2023, roughly one third of all in-network claims made to AvMed were denied by the medical insurance company. In this year, AvMed and United HealthCare were the medical insurance companies with the highest denial rate for in-network claims in the United States, at 33 percent each.
For buyers, the best dispute reason is arguably fraud or unauthorized activity. Cardholders who can produce compelling evidence showing that they did not approve a transaction are more likely to win a dispute than if it was initiated for another reason.
To win a civil case, you need evidence that proves each legal element of your claim by a preponderance of the evidence. This typically includes documents, witness testimony, physical or digital proof, and sometimes expert opinions.
How Often do Merchants Actually Win Chargebacks? According to the 2024 State of Chargebacks Report, merchants win on average about one-third of the disputes they face. Depending on the type of dispute, merchants win roughly 44% of “friendly fraud” cases, but their chances plummet to just 9% when true fraud is involved.
Claim not filed on time (aka: Timely Filing)
If a proper claim is submitted, but it's not within the timing window, it may result in a denial. It is recommended that you check with your Payers regarding their filing deadlines.
Important: Most insurance payers have a time limit for resubmissions—commonly 30 days from the initial denial. Be sure to track your resubmission in your billing software, and follow up as needed to confirm it's processed.