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Why Does My Health Insurer Deny the Care My Doctor Recommends?

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Updated November 14, 2008

Question: Why Does My Health Insurer Deny the Care My Doctor Recommends?
More and more, health payers are insisting we patients get permission from them to undergo a medical test or treatment. Then we may be told that no, the payer will not cover the cost of that test or treatment. Why do payers deny care to us, when we are paying them premiums for that service? Are there alternatives?
Answer:

There are few frustrations in this world like finally determining what treatment a patient needs for whatever health problem she has, only to be turned down for coverage by whoever the payer is, whether it's a private insurance or a government system like Medicare or Medicaid. When your insurer denies coverage, or payment for care recommended by your doctor, it can be devastating.

Like all the other mysteries of medical care that relate to the cost of care, the primary answer to this hurdle is, "follow the money."

Denial of care is a form of healthcare rationing. Think of it this way: The insurer or payer hopes to take in far more money than they pay out. That means that each time you need a test or treatment, they will make an assessment about whether it is the most cost-effective way to diagnose or treat you successfully.

If you need a treatment or test, and it isn't considered part of the standard of care for your medical problem, then they may have a reason to save their money by denying that test or treatment for you.

What payers know is that among the triangle of health care (you, your doctor and your payer) everyone's goals are different. You just want to get well. They just want to make money. Your doctor wants to make more money by taking care of you. Knowing the doctor may choose many different routes to test or treat you, possibly to increase his income, the payer makes sure that there is a good chance you will be successfully diagnosed or treated, and that they won't have to pay any more for that outcome than necessary.

While this may be frustrating for patients, it isn't necessarily bad if other treatments or tests are available. The less money the payer spends, the less we eventually pay in premiums.

The real problem comes in when there is no alternative that is covered for payment. A rare disease, requiring an expensive drug or other form of treatment, or a new form of healthcare technology, off label drugs, or an experimental treatment; these are examples of care your doctor might recommend that may not be covered by your payer.

What can we do if we are denied care by a payer?

There are a few things you can do if you are denied care by your payer.

  1. A. Fight the denial. Sometimes all that's required is to get in touch with your payer's customer service. Ask why you were denied, and what evidence they would need to reverse the decision. Then work diligently to change their minds.

    B. Ask your doctor what alternative may exist. This should probably be done at the same time as idea 'A' above, since it's possible your insurer will tell you there is an alternative. Having this information will help you continue your fight, or will give you some peace of mind that plan A is not your only option.

  2. Pay cash for the service. If you decide to move forward with this plan, be sure to negotiate the pricing with your doctor. Often doctors who accept cash (not all do) will reduce their fees when they know the patient must pay out-of-pocket.

  3. Don't pursue the test or treatment. This option is a distant third. There was really no reason for you to go to the doctor to begin with if this option is acceptable.

Learn Why "Follow the Money" Is the Answer to More Health Insurance Questions:

  1. About.com
  2. Health
  3. Patient Empowerment
  4. Money Matters: Managing Medical Costs and Health Insurance
  5. Follow the Money
  6. Denial of Care - Why Health Insurers and Payers Deny Coverage for a Patient's Care

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