Insurance companies are playing the odds, patient advocates say. They are counting on people not having the stamina to challenge every denied claim, even when there's a valid medical reason for a drug or treatment being covered.
"It's intimidating," said Betsy Imholz, special projects director for Consumers Union. "It's hard to understand the process and many people feel that the default answer from insurers is no."
Today I'll provide some tips on jumping through the many hoops the insurance industry might throw your way if you choose to appeal a denied claim.
While the appeals process is time-consuming and frustrating, it's often worth putting up a fight. A 2011 study by the Government Accountability Office found that for the relatively small percentage of denied claims that were challenged, about half ended up being reversed.
The insurance industry insists that denials result from a rigorous process of evaluating the medical soundness of prescribed drugs or treatments.
However, the GAO report said many denials can be traced to billing errors or missing information. Something as simple as an incorrect code submitted by a doctor's office can trigger a denial.
The bottom line is that it's entirely possible you will be able to get a denial reversed. But you will have to be thorough and diligent.
"Insurers make money when you pay in through premiums and copays, and they lose money when they pay out," said Chuck Idelson, a spokesman for the California Nurses Association, which supports a Medicare-for-all insurance system.
The first thing you need to do in mounting an appeal is to understand why the claim was denied.
Start small. Contact the insurer or pharmacy benefit manager and see whether there's any paperwork missing or an erroneous code. The fix might be as simple as resubmitting a certain document.
If that doesn't work, you will need to delve more deeply and take a crash course in medical/insurance jargon. It won't be easy.
Google is your best friend in surveying the medical landscape. But a website such as PubMed, operated by the U.S. Library of Medicine, can be helpful in chasing down studies on specific drugs and ailments.
Remember, a successful appeal is an exercise in organization. Keep notes of all your phone conversations and files of all documentation.
Try not to lose your cool. The system is designed to wear you down and to weed out the weak from the strong. An insurer has nothing to lose and everything to gain from putting barriers in your path.
Something to keep in mind: Insurers are so unhappy about paying claims that the percentage of premiums received that they have to pay back to policyholders is known as the "medical loss ratio." Seriously.
If you need a helping hand, a cottage industry of patient advocates exists to help guide you through the health care wilderness. Start with the Patient Advocate Foundation and their guide to the appeals process. Or check out the Alliance of Claims Assistance Professionals.
Still stuck? Your next move is turning to the state health agencies. Even if they can't advance your cause, they will probably be able to suggest fresh approaches.
David Lazarus is a Los Angeles Times columnist.