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When Your Health Plan Denies Coverage

Here's what you can do to try to settle the dispute

FRIDAY, Dec. 23, 2005 (HealthDay News) -- After fruitless attempts to conceive a child, your doctor has recommended infertility treatment, but your managed care plan won't cover it.

You might think you have grounds for an appeal, until you learn the exclusion is perfectly legal under the terms of your particular health plan.

"If it's not covered, there's not much you can do," said Gary Claxton, a vice president and director of the Health Care Marketplace Project at the Henry J. Kaiser Family Foundation.

Disputes of this nature frequently arise because plan members don't fully understand their health plan's terms for coverage or rules for participation, according to a January 2003 guidebook published by the Kaiser Family Foundation and Consumers Union to help private health plan members navigate the appeals process.

"I think people don't always realize that certain things have limitations on them or may not be covered, or that there's a separate deductible when you go in the hospital," noted Claxton, who's involved in preparing an updated version of the guide.

On the other hand, some situations are less clear-cut; for example, when a plan denies coverage of an experimental treatment or finds that a particular treatment or test is not medically necessary. When the stakes are high, the appeals process may be the best remedy available to you.

A majority of Americans under age 65 with private health insurance are covered under a plan offered through their own or a family member's job. When a dispute arises, the member's rights will depend on the type of employer-sponsored health plan in which he or she is enrolled.

Someone covered under a group health plan that an employer purchased from an insurance company typically has the right to appeal under federal and state laws. But if an employer is "self-funded," meaning the company assumes the financial risk for costs incurred under the health plan and pays for those health claims directly, state laws do not apply, Claxton said.

If you don't know which type of plan you are enrolled in, ask the employer's human resources manager, he advised.

Consumers who purchase insurance directly from a health plan must examine the laws of their state to determine their appeal rights.

In most cases, health plans have an established appeals process to handle disputes internally. "You have to start with the plan first," Claxton said.

Many disagreements are resolved during the internal appeals process.

But if you've completed the process and still haven't won your case, there may be another avenue for recourse. Forty-one states and the District of Columbia require external review of member grievances by a panel of independent experts. That process, which varies from state to state, is generally available to people who buy their own health insurance or whose employer buys coverage from an insurer.

It's no guarantee of success, but the odds aren't bad: Nationally, external reviewers overturned benefit denials in 45 percent of cases, according to a Georgetown University study published in 2002.

More information

Check this consumer guide from the Kaiser Family Foundation and Consumers Union for more advice on handling health plan disputes.

SOURCES: Gary Claxton, vice president and director, Health Care Marketplace Project, Henry J. Kaiser Family Foundation, Washington, D.C.; "A Consumer Guide to Handling Disputes with Your Employer or Private Health Plan," January 2003, Henry J. Kaiser Family Foundation and Consumers Union; Assessing State External Review Programs and the Effects of Pending Federal Patients' Rights Legislation, March 2002, Institute for Health Care Research and Policy, Georgetown University, Washington, D.C.
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