Decoding the System: Smart Strategies for Tackling Health Insurance Denials and Beyond
When people go to the hospital, whether for mental health treatment or a routine doctor’s visit, their concerns often extend beyond just insurance. However, the system meant to assist with medical expenses frequently becomes a significant stressor, as issues like billing, paperwork, and claim denials can leave individuals feeling emotionally exhausted.
Recently, these frustrations were highlighted in public discourse following the killing of the CEO of UnitedHealthcare, the largest health insurance company in the U.S. The reaction that followed was not directed at the shooter but rather at insurance companies, as many voiced their personal struggles with health insurance.
Mental health advocates have long recognized the emotional burden that dealing with insurance places on patients. “There’s a lot of concern about accountability,” noted Joe Feldman, CEO of Cover My Mental Health, a nonprofit offering free resources to help people navigate denied insurance claims for mental health and substance use treatment. He added, “Who ensures that insurance companies provide the basic support and services they’re supposed to? There’s a great deal of frustration surrounding this issue.”
Eleanor Hamburger, a lawyer in the Seattle area specializing in health and disability insurance cases, notes that consumers enter a system that is inherently unfavorable to them. When claims are denied, health insurance companies often make it difficult to understand the policies behind these decisions. Additionally, the varying rules across different types of insurance—such as private, government, or self-funded plans—only increase confusion and frustration, according to Hamburger.
Cheryl Kauffman, founder of Seattle Patient Advocates and a local physical therapist, observes that many of her clients express dissatisfaction with the healthcare system. However, patients can empower themselves by learning more about their insurance plans, which can help them better address issues when they occur.
Kauffman acknowledges that this approach isn’t a complete solution but emphasizes its practical value. “It gives people some control over aspects they can manage,” she said, highlighting the importance of taking proactive steps to navigate the complexities of health insurance.
For individuals dealing with denied coverage, unexpected bills, or simply confusion about the insurance process, here are some strategies to help manage the health insurance system:
- Understand Your Rights and Plan Details
Patient advocates suggest starting by thoroughly understanding your insurance plan and the specific benefits it provides. Summaries of health plans typically provide a concise overview of covered and excluded services.
For deeper insights, especially when dealing with unclear denials, review the full policy document—often found in a benefits booklet or “certificate of coverage.” These documents are usually accessible via the insurer’s online patient portal or through your employer. You can use them to search for specific situations or billing codes to determine what is covered or excluded under your plan.
“Many people aren’t well-informed about their policy’s coverage details,” noted Cheryl Kauffman. She shared her personal experience of attempting to get a minor procedure approved, only to discover later that her claim was denied because the procedure was covered exclusively for individuals with diabetes. After checking her certificate of coverage, she realized the denial was valid.
“Of course, I felt frustrated and disappointed,” Kauffman admitted. “But most people don’t bother to take this step, which could save them from surprises down the road.”
- Seek Assistance in Communicating with Your Insurance Company
There are various resources, whether free or paid, that can support consumers in navigating the paperwork and phone calls required when dealing with insurance companies.
Patient advocates, including professionals like Cheryl Kauffman, offer assistance with all facets of the healthcare system. Some advocates provide comprehensive support, while others specialize in particular areas, such as clinical care or billing issues.
Some nonprofit organizations provide free advice or online resources to assist individuals in navigating insurance-related challenges.
One example is Cover My Mental Health, which offers free support specifically for those dealing with denied claims related to mental health and substance use treatment. Founder Joe Feldman created the platform based on his personal struggles to secure coverage for his daughter’s residential treatment. The website provides guidance for various scenarios, such as addressing denials due to lack of “medical necessity” or seeking help from insurers when an in-network provider cannot be found. It also includes templates for letters or scripts for phone calls, assisting users in filing formal complaints with their insurance companies.
Another resource is the Northwest Justice Project, a nonprofit that offers free legal assistance and collaborates with local healthcare providers through medical-legal partnerships to help individuals access necessary care.
In more extreme situations, such as when someone is in crisis or unable to make decisions independently, they can authorize another person to act on their behalf. This can be done through tools like a mental health advanced directive, which allows for pre-planned decision-making in critical situations.
- Keep Detailed Records
Eleanor Hamburger, a consumer health lawyer, advises keeping thorough records of all communications with your health insurance company.
“Anything you’re told over the phone is irrelevant unless it’s documented in writing,” she explained. According to Hamburger, healthcare plan administrators are only obligated to provide documentation if you formally request it in writing.
Consumers are legally entitled to access the internal files their health insurance company uses. If your coverage is denied, Hamburger recommends sending a written request—either via physical letter or email—for all documents the company considered in making that decision. If mailing a letter, include a request for a return receipt to confirm delivery.
The materials you receive might include internal discussions regarding your denial. “You might be surprised by what you discover,” Hamburger notes. “It could differ significantly from what was stated in the denial letter and provide insight into the reasoning behind the decision, helping you craft a stronger appeal.”
While insurance companies are legally obligated to share these files upon request, the consequences for non-compliance are often minimal, meaning they may not always cooperate. Obtaining this information can be crucial when appealing a claim denied due to lack of “medical necessity.”
“Medical necessity isn’t a concept taught in medical school—it’s a legal term,” Feldman explains. “Clinicians are trained to prioritize safety, effectiveness, and accepted standards of care. When a legal standard conflicts with their training and practice, it can lead to complications.” This discrepancy can result in disputes between patients and insurers over what constitutes necessary treatment.
Understanding the criteria an insurance company uses to label a treatment as “not medically necessary” can assist doctors in writing letters of support for patients, explaining why the treatment is indeed essential.
- Know What You’re Paying For
Cheryl Kauffman advises her clients never to pay the initial medical bill right away, referencing a book by Marshall Allen titled Never Pay the First Bill . Instead, she recommends waiting for the explanation of benefits (EOB), a document that outlines which parts of the bill are covered by insurance, any applied discounts, and the remaining charges you’re responsible for.
If anything seems incorrect, don’t hesitate to contact your insurance company for clarification. “There are many steps involved in billing and claims processing, and humans are involved at every stage,” Kauffman notes. “Mistakes happen.”
Additionally, hospitals are obligated to offer financial assistance to low-income patients through programs known as “charity care.” Recently, eligibility requirements for these programs have been broadened, meaning nearly half of Washington residents may now qualify for some form of debt relief for treatments deemed “medically necessary.”
The nonprofit Dollar For can assist in determining your eligibility for charity care.
- Escalate Your Complaint
Few people pursue appeals for denied insurance claims due to the complexity of the process and the time and effort required. However, while data on the success rates of appeals varies, healthcare advocates suggest it may still be worthwhile to attempt an appeal. Each insurer has its own appeal process, typically requiring a letter from the patient detailing the denied service, why they believe it should be covered, and pertinent information about their health condition. Including supporting documents or a doctor’s letter can strengthen the case. The Washington Office of the Insurance Commissioner provides guidance and sample letters to help with appealing denials.
“I don’t even appeal every denial I encounter, even when I think it’s unjust,” admits Eleanor Hamburger. “This is quite common, and insurers likely rely on this behavior.”
Hamburger also recommends filing a complaint with the Office of the Insurance Commissioner, the state agency responsible for overseeing insurance costs. This agency can help consumers seek clarification from insurers regarding denied claims and tracks complaints. If patterns of legal violations are identified, the agency may investigate and impose fines on insurers.
Local lawmakers can also play a role. For instance, House Bill 1432, introduced during this legislative session, aims to enhance access to mental health and substance use disorder treatment. The bill proposes increasing transparency in the appeals process by requiring insurers to publicly disclose their criteria for claim determinations.