How to Appeal an Insurance Denial of Rehab Coverage

Author

Nikki Seay

About the Author

Medical Reviewer

Libby Pellegrini

About the Reviewer

If you recently got a denial letter from your insurance company stating they will not cover your addiction treatment, you’ll likely want to write an appeal letter.

After doing the work to get yourself or a family member into a drug rehab program, you no longer need to worry about how to pay for treatment, right? That’s what a lot of people think…until an insurance coverage denial letter arrives in the mail weeks after starting treatment. Now your head is filled with questions and uncertainty. Does this mean you’ll be forced to pay out of pocket? Can you make the insurance company reevaluate their decision?

Don’t panic! Unfortunately, many insurers automatically deny coverage for addiction treatment. But as a policyholder, you have the right to file an appeal asking your insurance company to reconsider their decision. And being persistent can pay off. In fact, according to the United States Government Accountability Office, 39 to 59 percent of internal appeals were reversed in favor of the consumer.¹

Internal Appeal vs External Appeal

When you receive a denial letter, there are two ways to appeal the health insurance company’s decision:

• Internal appeal: If a claim is denied, you can ask your insurance company to conduct a full and fair review of its decision. If there’s a matter of urgency, the insurance company has to speed up the appeal process.
• External review: If your internal appeal is denied, you then have the right to appeal for an independent third-party review, which means the insurance company no longer has the final say in whether or not they pay your claim for addiction treatment.

Steps of the Internal Appeals Process

In this article, we are focusing on the internal appeal. There are three steps in the internal appeals process, and those are as follows:

• File a claim: This is your initial claim or request asking the policy to cover your addiction treatment. The treatment provider usually files a claim with the insurance company so they can be reimbursed for the costs of rehab or treatment services.
• Your insurance denies the claim: Legally, your insurer must explain, in writing, why they chose to deny your claim for treatment. And they must provide that explanation within:³
  • 15 days when seeking prior authorization for treatment
  • 30 days when medical services have already been provided
  • 72 hours when there is an urgent need for care
• File an internal appeal: When your insurer denies coverage that your healthcare provider considers medically necessary, you can file an internal appeal. And you must file the appeal within 180 days (6 months) of receiving notice that your claim was denied.

What Kind of Denials Can You Appeal?

If your insurance company won’t agree to provide or pay for recovery services that you believe should be covered by your plan, you can file an appeal.

Some of the most common reasons for denial are:

• The benefit isn’t offered under your health plan.
• You received recovery services from a provider or a facility that isn’t in your plan’s approved network.
• The requested service or treatment is “not medically necessary.”
• The requested service or treatment is an “experimental” or “investigative” treatment.
• You’re no longer enrolled or eligible for enrollment in the health plan.
• Your coverage is being revoked or canceled going back to the date of enrollment because the insurance company claims you provided false or incomplete information when applying for coverage.

Internal Appeals: Facts to Keep in Mind

• It is important to read your insurance policy carefully, then get in touch with them to ask for details about their appeals process.
• No matter how many times you speak to someone at your insurance company, document every instance of communication. Note the date, time, person you spoke with, and what you discussed.
• Be sure to submit any additional information that you want the insurer to consider, such as a letter from your physician or therapist.
• If you’re not comfortable filing your own appeal, the Consumer Assistance Program in your state can help you file the appeal.²
• If your insurance company denies your claim again, you can file an appeal for external review.

 How Long Does It Take to Process an Internal Appeal?

Decision timelines differ, mainly depending on whether or not the appeal is expedited due to urgency. Generally speaking, however, you can expect the following:³

• Internal appeals must be completed within 30 days if your appeal is for treatment you haven’t received yet.
• Internal appeals must be completed within 60 days if your appeal is for treatment you’ve already received.
• Internal appeals for urgent care are expedited and must be completed as quickly as your medical condition requires, but at least within four business days. Typically, these decisions are completed within 24 to 72 hours. The decision can be delivered verbally, but must be delivered in writing within 48 hours.

How to Write an Insurance Appeal Letter

Sending an appeal to your insurance company might seem intimidating, but it can be incredibly simple if you stay organized! Remember to check with your insurance company first to confirm their appeal process. You may need to send a letter, along with a standard appeal form to initiate the process.

Include the following in your internal appeals letter:

• The salutation of your appeal should include the name of the appeals analyst referenced in the denial letter.
• Include your claim number and plan ID number
• State why you need addiction treatment and why you believe your insurance policy covers this service.
• Ask your medical provider to prepare a letter of medical necessity explaining why you need treatment for substance use disorder.
• Attach or include a copy of your denial letter.

Tips for submitting or mailing your appeal:

• Track your letter when it’s mailed. If submitted by fax, keep the confirmation of successful transmission. If submitted by mail, send the letter by certified mail with a request of a return receipt. If submitted by FedEx, add tracking to your letter. You should receive official notice within 7-10 days that your appeal has been received.
• If you’re requesting an expedited review, it should also be faxed or hand delivered.

Insurance Appeal Letter Template

The National Association of Insurance Commissioners suggests using the following template when writing an internal appeal letter.⁴ Be sure to personalize all sections in brackets.

…

[Your Name]
[Your Address]

[Date]
[Address of the Insurance Plan’s Appeal Department]
Re: [Name of Insured]
Plan ID #:
Claim #:

Dear [Name of appeals analyst referenced in denial letter]:

I am writing to appeal the [name of insurance plan and policy number] decision to deny [name of service or treatment sought] for [your name – or name of insured, if other than yourself].

The reason for denial was listed as [reason listed in denial letter], but I have reviewed my policy and believe [treatment or service] should be covered.

[This is where you want to provide more detailed information about the situation. Write short, factual statements. Do not include emotional wording. Include quotes from your policy member’s handbook and Evidence of Coverage to establish that addiction treatment is a covered benefit and not expressly excluded. Be sure to cite your state’s mandated benefit laws requiring that the health plan provide this coverage.]

[Describe your substance use disorder and health condition; explain how addiction treatment would benefit you and what will happen if you do not receive treatment.] 

[If you are including documents, include a list of what you are sending here.]

If you need additional information, I can be reached at [telephone number and/or e-mail address]. I look forward to receiving your response as soon as possible.

Thank you for your immediate attention to this matter.

Sincerely,

[Your Signature]

[Your typed name]

…

Resources

1. GAO-11-268 Private health insurance: Data on application and coverage denials. (2011). U.S. Government Accountability Office. 
2. Consumer support and information. (n.d.). Centers for Medicare & Medicaid Services. 
3. Internal appeals. (n.d.). HealthCare.Gov.
4. How to Appeal Denied Claims. (n.d.). National Association of Insurance Commissioners