By Nicholas W. Stuller
One of the most frustrating experiences consumers have, is when an insurance claim is denied. Many people do not challenge the decision an insurance carrier makes and simply pay the outstanding medical bill or pay out of pocket for the damage. However, there are occasions when it is possible to fight the decision and win. My own experience of fighting and winning against a false denial holds many useful lessons.
A number of years ago I badly injured my index finger. I was doing a home project and cut my finger in half, right below the nail bed. I was wearing heavy work gloves at the time and was not aware of how bad it was until I got to the emergency room.
Very thankfully the head of the plastic surgery department was on shift when I arrived and sewed back the finger, a total of 50 very small stiches. There was one set of stiches at the nail bed and another set of stiches on the surface. The bone was broken in half as well, so the goal was three-fold: keep the tip of the finger, heal the bone and hopefully get the nail to grow back. The surgeon was successful in all three goals, but the fight that ensued with the insurance carrier was almost as stressful and time consuming as the accident and recuperation itself.
A month or two after the accident I received a bill from the surgeon’s office for the cost of most of the procedure, for just over $7,000. The medical insurance my company had (I was the CEO of the company) was quite good, so I assumed there was simple mistake. After speaking with the doctors billing office, they said the insurance company declined the claim. They tried to fight it, but said I had to get involved.
I got the insurance carrier on the phone and they stated that the services the doctor billed for were “duplicative”. I read the bill with them on the phone and pointed out that the words and terms for each line-itemed procedure were quite different, and while I was no doctor and don’t read Latin, I was pretty sure none of these were duplicative.
After demanding to speak with several supervisors who each denied the claim, they still stuck to the “duplicative” story and refused to pay. I then said, “well, this means you are officially accusing the doctor, the head of the plastic surgery department of this very large hospital, of insurance fraud by charging twice for the same thing. If this is your official statement, then we together should formally accuse him of this and contact the state medical board to bring him up on charges”. They of course said no, we’re not saying that, but still refused to pay the bill.
I then told the supervisor that if I don’t get a positive response in five days, I was going to call the following organizations and file formal complaints against the insurance company: The State Insurance Commissioner, The Department of Corporations and The State Attorney General.
About a week and half later, I received a check for nearly $8,000, much more than the original bill. It turns out, that states’ law called for a significant interest penalty for claims not correctly paid to an insured.
This very time-consuming experience taught me several valuable lessons:
Always Escalate to the Next Supervisor When a representative declines your claim, demand to speak to a supervisor, and always get a name and document day and time of your conversation. Often, they say “this is our policy and my supervisor will say the same thing”, but at some point, up the chain an executive can make a decision in your favor.
Insurance Carriers are Heavily Regulated Most states have very strong laws protecting consumers from abuses including denial of claims. No Carrier wants another case opened up by the State Insurance Commissioner as fines can be costly to them, so when you know you are right be prepared to contact your states Commissioner and tell the carrier of your intent.
Persistence is Key Big companies often have an unwritten policy to wear you down by saying no regardless, counting you will give up. Do not give up, even if it means speaking with five or more people. Fighting an insurance company takes time, but it can and does work.
Before you decide to fight the claim denial, make sure you are correct. Re-read your insurance policy and have your financial planner or insurance agent help you in deciding if you are indeed correct or not. If you know you were unfairly denied, get prepared for allocating time, but you will ultimately prevail.
Nicholas W. Stuller is the Founder and CEO of MyPerfectFinancialAdvisor the premier matchmaker between investors and advisors using personalized data, proprietary algorithms, and deep industry experience.