How to read a denial letter line by line

A denial letter does five jobs. It says what was refused, gives a reason, points to the rule the plan used, tells you how to challenge the decision, and sets your deadline. Read it with a pen, in that order, and mark each part. If a part is missing, that is useful to know, and you can ask for it.

What this means

The official name for a denial in private coverage is an “adverse benefit determination”. It covers a denial, a cut or an ending of a benefit, and a failure to pay in whole or in part. Other programs use their own names for the same job. Original Medicare sends a Medicare Summary Notice, which is not a bill and gives the reasons for the decision and how to ask for a first appeal. A Medicare Advantage plan sends a Notice of Denial of Medical Coverage (or Payment), which uses form CMS-10003 (CMS is the Centers for Medicare & Medicaid Services, the federal agency that runs Medicare). Medicaid sends a notice of adverse action that must state the reasons, the regulations relied on and your right to a hearing.

What to do

1. Find the two dates. The date printed on the letter and the date you received it. Keep the envelope. Different programs count your deadline from different dates.
2. Find what was denied. The service, drug or claim, the date of service, the provider and the amount. Non-grandfathered private plans must give enough detail to identify the claim.
3. Underline the reason, in the plan’s own words. A private plan’s notice must give the specific reason and the specific plan provisions it relied on. Note any denial code and what it means.
4. Look for “additional information needed”. The notice must say what material would fix the claim and why it is needed. If the fix is a missing form or record, your doctor or provider may be able to supply it quickly.
5. Look for the rule or guideline. If the plan used an internal rule, guideline or protocol, the notice must either set it out or say it was used and that you can have a free copy on request. For a medical necessity or experimental treatment denial, the notice must either explain the clinical judgment as applied to your medical circumstances, or say that explanation is free on request. Ask for these in writing with the request for clinical criteria.
6. Find your appeal rights. Where to send the appeal, how, and the time limit. Private non-grandfathered plans must also explain how to start external review (review by an independent reviewer outside the plan) and give contact details for a state consumer assistance program, if there is one.
7. Turn the deadline into a date. Put it on your calendar and check it with the deadline calculator. Check the date on your notice, which controls.
8. Mark what is missing. The denial letter checker compares your letter with what it should contain.

What the letter may say, and what to say back

“This service was not medically necessary.” That is a conclusion, not an explanation. Ask which criteria the plan applied and for the clinical explanation. Both are available free on request if they are not in the notice.

“This service is not a covered benefit.” Ask which plan provision it relies on, and check whether the service is excluded in your plan document or whether the plan is really making a medical necessity decision.

“No prior authorization was obtained.” Ask who was supposed to request it. Private plans cannot deny a claim for lack of prior approval where getting approval was impossible or could have seriously risked life or health, for example if the patient was unconscious.

The rule

A private plan’s denial notice must be written or electronic, “calculated to be understood by the claimant”, and must state the specific reasons, the specific plan provisions relied on, any additional material needed and why, and the plan’s review procedures and time limits. Source: Code of Federal Regulations (CFR) Title 29, section 2560.503-1(g)(1), the federal claims regulation. Check the date on your notice, which controls.

Watch for

• A request for information is not an appeal. Asking for diagnosis and treatment codes cannot be treated by a non-grandfathered plan as filing an appeal. Ask, and keep your appeal deadline in view.
• Phone first, letter second. A plan may give an urgent denial by phone, but a written notice must follow within 3 days.
• Not every plan follows these rules. Grandfathered plans skip some of the extra items. The Affordable Care Act appeal rules do not apply to short-term plans, health care sharing ministries and fixed indemnity products, and we have not confirmed whether the general federal claims rule for employer plans covers a fixed indemnity plan that comes through an employer. See what a denial letter must tell you.
• Letters from your provider are not plan letters. A bill or a “balance due” notice is not a denial.

What next

• See the full list the notice must contain in what a denial letter must tell you.
• Sort the reason into one of three groups: the three families of denial reason.
• Ask for the file the plan used: how to request your claim file.
• Go to the topic page, read your denial letter.