a red stamp with the words "Insurance Denied"

How to Handle Insurance Denial in Business

Insurance denials are a common issue in business, and they can have a significant impact on a company’s bottom line. Insurance denial can have several negative consequences for businesses. They can lead to increased costs, lost revenue, and even legal action. To avoid insurance denials, businesses should carefully review their policies and make sure that they are filing claims correctly. They should also keep detailed records of all medical expenses. If a claim is denied, businesses should appeal the decision promptly and professionally.

Understanding Your Policy

Here is a brief overview of why understanding your insurance policy is crucial. All reasons relate back to the main goal of insurance: to make sure you are maintaining adequate coverage in the event of a loss. Thus, you want to be knowledgeable about your insurance policy to be sure that you are adequately covered for the risks that you face.

You will be able to make informed decisions about the activities you engage in and the coverage you select. You will be able to prevent any surprises and unexpected costs in the event that you have to file a claim. Ultimately, you want to know not just that you are covered but that you are getting the most out of your policy.

Tips for Reviewing Your Policy and Key Points to Pay Attention To

Make sure you 100% understand the coverage you have. Review your policy carefully and ask your insurance company about anything that you don’t understand and any coverage that you might need (although they will generally tend to overinsure you).

Check all of your deductibles and co-pays. Make sure you are aware of how much you will have to pay out of pocket for covered services. Review your coverage limits and update if necessary, as your assets grow. Make sure you have enough coverage to protect yourself financially in the event of a claim. Compare your policy to other policies, with a focus on policy exclusions.

It is a good idea to shop your policy around to make sure you are getting a good deal on your insurance. Consider whether you need additional coverage. If you have any new assets or liabilities, you may need to add additional coverage to your policy. It is a good idea to review your policy annually. You should also review your policy after any major life changes, such as a new job, marriage, or the birth of a child. Make sure your coverage is still meeting your needs and that you are not overpaying for your insurance.

Common Reasons for Insurance Claim Denials

There is a nearly infinite number of reasons an insurance company could reject your claim. The following are some of the most common:

-The claim was not filed correctly or lacked sufficient documentation.

-The claim was for a pre-existing condition.

-The claim was for a service that was not covered by the policy or fell under a policy exclusion.

-The claim was for a service that was not medically necessary.

-The claim amount fell outside of policy limits or was not filed timely.

-The claim was for a service that was provided by an out-of-network provider.

There are other reasons that claims are denied, but they are usually present for less typical types of coverage.

Steps to Take Immediately After an Insurance Denial

It is very important to understand how to handle insurance denials. If you do not handle them correctly, you may be permanently prevented from recovering. First, you should review the denial letter carefully to understand the reason for the denial. Seek clarifications, if necessary. Then you should gather all relevant documents that might overcome that explanation. If you think there was a simple misunderstanding, you could write a letter or call the claims adjuster. However, it may be necessary to contact an attorney for assistance. Be polite but persistent with the insurance company.

The Appeals Process

When a claim is denied, the business may have to appeal the decision. This can be a time-consuming and frustrating process, and it is not always successful. If the appeal is unsuccessful, the business may have to pay for the service out of pocket. If you decide to appeal the denial, you should follow the company’s policy on appeals and follow the applicable law. That often involves submitting a letter of appeal explaining why the denial was wrong and providing documents to support your appeal. You should send the letter by certified mail, return receipt requested, within the timeline for the appeals process.

Working with a Business Attorney

The role of a business attorney in appealing insurance denials is to identify the specific reasons for the denial, gather evidence to support the claim and send a demand letter to the insurance company explaining that the denial is wrong and that the claim was rightful and should be covered. The attorney can represent you at a hearing, appeal, or litigation if the insurance company continues to deny your claim.

Preventing Future Insurance Denial

If you have a fear or a history of denials, it may be a good idea to review best practices for avoiding insurance denials in the future. These include recognizing the importance of regular policy reviews and updates. Consulting with an attorney who can help you understand your coverage and rights under the law and not engaging in deceptive business practices could provide peace of mind and prevent denials.

Helping your Business Handle Denial of Insurance

There is a consensus of opinion around insurance companies, and it’s not generally positive. If you have been unfairly treated by your insurance carrier and need professional assistance, look no further. Our knowledgeable attorneys have counseled many clients who have had insurance coverage denial issues. If you or your business are confronted with these issues, we are happy to answer your questions and provide legal advice. We will step up and get involved to demand insurance coverage for your claim. Call the trusted attorneys at Lowthorp Richards at (805) 981-8555 or fill out our online contact form. We operate primarily in the Tri-Counties area  – Ventura, Santa Barbara, and San Luis Obispo

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Cristian R. Arrieta, Lowthorp Richards McMillan Miller & Templeman, A Professional Corporation, 300 E. Esplanade Drive Suite 850, Oxnard, CA 93036