A medical peer review is initiated by a health insurer to determine whether the medical treatment provided for a covered person is compensable or not. An insurance denial may occur due to certain specific reasons and these are outlined in the EOB or the Explanation of Benefits document the insurer sends to the claimant. A medical peer review is important because it is used to make final judgments about the quality of care provided. It helps prevent insurance fraud and control escalating healthcare costs. Accurate peer review services provided for insurance payers and lawyers help these entities improve their decision making when it comes to resolving complex billing and medical utilization disputes.
What are the common reasons for an insurance denial?
- The treatment is not considered medically necessary or appropriate.
- The medical care is considered experimental or investigational.
- Clerical mistakes such as wrong spellings, data entry errors on the claim, wrong insurance policy number, and typos.
- The treating doctor is an out-of-network physician.
- The treatment/medication required, but did not have, a referral or prior authorization from the treating doctor.
- The claimant’s insurance coverage has lapsed or he/she is no longer enrolled with the health insurer through which the claim was submitted.
Typically, an insurance company can challenge bills by medical peer review for up to 90 days prior to the challenge. The insurer has to send the challenged bills with supporting documentation to an authorized peer review organization, which is approved by the Insurance Commissioner for this purpose. Importantly, the bills for any disputed treatment can be peer reviewed only by a physician belonging to the same specialty. The peer reviewer does not typically meet the patient for an examination. He only reviews the records and bills, and based on accepted norms and guidelines, provides an opinion regarding whether the treatment is reasonable and necessary. The peer review physician is not required to contact the claimant’s treating doctor.
A claimant who has received a denial for coverage can file an appeal asking the insurer to reconsider their decision to deny covering a treatment, service or medication for his/her particular health condition. Insurance plans may vary regarding their processes and the required information. Typically, these details are outlined in the policy documents and also on the health insurer’s website. For claimants enrolled in a health plan offered by their employers, these details are provided in the member handbook or by the HR department. Medicare coverage details are available in the Medicare &You handbook.
The insurance denial appeals process has 3 distinct levels:
- 1st level appeal: The claimant and his/her doctor contacts the insurance company and place a request that they reconsider the denial. The doctor may also request to talk to the insurance peer review physician as part of a peer-to-peer insurance review.
- 2nd level appeal: In this step, the appeal is reviewed by a medical director at the insurance company who was not involved in the claim decision. This appeal is intended to prove that the request should be accepted within the coverage guidelines.
- Independent external review: In this, an independent reviewer with the insurance company and a doctor with the same specialty as the claimant’s doctor evaluate the appeal to determine if they will approve or deny the claim. An external review is requested if an internal appeal is unsuccessful or not possible.
As providers of medical record retrieval services for insurance lawyers, we understand how important it is to ensure that coverage is being provided for deserving claimants. Healthcare funds are limited, which makes careful evaluation of claims and disbursement of compensation absolutely imperative. Requests for therapies that are medically unnecessary and those for unproven therapies have to be weeded out to control costs. It would be unfair to say that insurance companies reject payments without proper justification. Appropriate therapies are reimbursed to ensure that the covered entity is receiving the necessary treatments and medical services. Typically, insurance companies provide their guidelines clearly and also notify of any updates they make in a timely manner. Policyholders must have a clear understanding of the same.