Reasons Your Health Insurance Claims Get Denied
Dealing with health insurance denials can be frustrating. There’s no shortage of confusing terminology and processes that make it hard to resolve the issue. But before you try to contact your insurer directly, here are some common reasons to rule out first.
Incorrect Information on the Claim
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Mistakes like misspelled names or wrong policy numbers aren’t just simple errors—they can cause system mismatches that result in denial. Even if it seems minor, an error in your personal or billing details can prevent the system from verifying the claim.
Expired Insurance Policy
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Claims submitted after a policy lapse are automatically declined. An expired policy not only ends coverage, but it may also involve penalties or limits when reinstating. That’s part of the reason why it’s so important to maintain active status.
Out-of-Network Provider
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Insurers work with specific networks to control costs. Using a provider outside the network means the insurer won’t pay the agreed rates, leaving you with potentially higher costs. Check your plan’s regional or specialist coverage rules to prevent this.
Lack of Preauthorization
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Some treatments require insurers to approve them beforehand to ensure eligibility. Without preauthorization, even emergency procedures might face hurdles later. This step allows insurers to confirm the necessity and cost scope of the service.
Excluded Services
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Insurance plans often don’t cover elective or alternative treatments, such as cosmetic procedures or experimental therapies. Even if these services seem essential to you, they may fall outside what the insurer defines as eligible care.
Duplicate Claims Submitted
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If a claim is accidentally resubmitted or appears as a duplicate in the system, it can trigger a denial. Such errors might occur when a healthcare provider resends the claim or fails to mark it as resolved. This confuses processing systems.
Missing or Insufficient Documentation
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Medical claims often require proof, like hospital records or a physician’s note, to validate the treatment received. Insurers deny claims that lack proper documentation because they can’t verify the purpose or accuracy of the expenses.
Service Deemed Medically Unnecessary
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Insurers deny claims if they determine the procedure wasn’t crucial for your health. For instance, using advanced imaging techniques instead of standard diagnostic tests might fall into this category unless your provider explains why it’s needed.
Coverage Limit Exceeded
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Insurance policies set financial limits or caps for specific categories, like rehabilitation or mental health sessions. Claims surpassing these caps are denied, regardless of medical necessity, so make sure to go through your policy’s thresholds.
Delay in Claim Submission
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Insurance companies set deadlines to receive claims, often ranging from a few weeks to months after treatment. Late submissions cause delays in the insurer’s processing timelines, which can lead to outright rejection when deadlines are exceeded.
Coordination of Benefits Issues
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When multiple insurance policies exist, the primary and secondary insurers need clarity on who pays first. Miscommunication or a lack of proper coordination between them can delay or void the claim and leave policyholders caught in the middle.
Pre-Existing Condition Clauses
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Pre-existing conditions may come with a waiting period before coverage kicks in. If you claim during this time, the insurer will deny it outright, regardless of the severity of your condition or the treatment’s urgency.
Incorrect Billing Codes
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Healthcare providers assign billing codes to all treatments, but any mismatch in coding can disrupt processing. For example, a minor clerical error could change the procedure’s category entirely and cause the insurer to reject the claim as ineligible.
Treatment Outside Coverage Area
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Some policies are restricted to specific states or regions. If you’re treated in another location, the insurer may deny your claim unless it’s an emergency. Understanding geographic limitations can prevent this kind of unexpected financial strain during travel.
Failure to Meet Deductible Requirements
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Insurance deductibles are out-of-pocket amounts you must pay before coverage begins. Submitting claims before reaching this threshold will result in denial, as the insurer hasn’t yet activated the payment responsibilities defined in your plan.